Prices kept rising in the first half of 2003

While the world’s stock markets have languished, at least until President Bush declared the end of combat operations in Iraq, art market prices have been rising uninterruptedly since the start of the year. The only noticeable impact of the Iraq war has been a fall in volume.

The market draws in its horns

The number of lots changing hands in the first four months of 2003, was down by 32% on the same period in 2002, and by 40% on the first four months of 2001. The market, typically, pulled in its horns in the face of uncertainty. From New Year to April 30, there were fewer than 4,000 catalogued auctions in the world, compared to more than 6,000 in the same period in 2002. The market was still not back to normal in the early summer. Only 800 auctions between mid-June and mid-July and a third fewer than in 2002.

Art Price Growth (January 1998 – June 2003)Artprice Global Index, base January 1998 = 100
Currency: EUR

Competition hots up on the auction floor

Despite a falling number of sales, turnover has held up relatively well, falling by just 11% over the first six months of the year compared to the first half of 2002, most obviously because prices have been rising steadily, gaining 5.8% over the period. Logically enough, with noticeably fewer pieces coming on to the market, competition at auction has intensified. Collectors who wanted to take a piece home had to be ready for some fierce bidding and counterbidding. Prices rose and no-sales fell. In the first half of 2003, 68% of lots found a buyer, compared to just 63% a year previously.Added to the mix was a general improvement in the quality of works offered in France and the UK, which are the world’s biggest auction markets in volume terms (see ArtMarketInsight July 11, 2003).

So it seems likely that as recovery takes hold we will see a far greater number of lots passing under the auctioneers’ hammers. But if volumes rise significantly from September on, it is also likely that the uptrend in prices will ease off.