Which countries are driving the rise in prices?

Although art market prices have been rising again this season only 116 lots topped the million euro mark in the first six months of 2003, compared to 164 in the same period last year. Headline-making records at the prestige auctions were relatively few this year. But such sales are not typical of the wider market. They may play a big role in promoting the image of a few auction houses but they remain the exception. Nearly 90% of the market’s turnover is in works that sell for under EUR 10,000.

Average price of artworks by country Half year change (January 1998 – July 2003)

This core market is centred in Europe, particularly France, Germany and the UK. Taken together, these three countries handle 49% of all lots sold for under EUR 10,000. The USA is a minnow in this price bracket with just 10% of transactions, but leads the top end of the market. The average hammer price at a US auction is over EUR 40,000, more than five times the average in France or Germany, although it should be remembered that these averages tend to be skewed by the extreme prices and record bids that are common in the US. The UK market remains very mixed. Bargain sales run alongside exceptional auctions featuring lots to rival May in New York. As a result artworks auctioned in London in the first half of 2003 fetched an average of almost EUR 35,000, just EUR 5,000 below the New York average. The sharp drop in average US hammer prices and the steady rise in London prices have brought the world’s two auction capitals closer than ever before.

Looking at the country trend suggests the current rally has been driven more by European markets than by the US, where the market was probably hurt by the conflict in Iraq. Also, since the French market opened up to international competition, both the quality of works sold in France and the prices they fetch have risen uninterruptedly. The average lot sold in France now goes for EUR 9,380 — double the average price in 2001 before the reforms. Even at the top-end of the market (artworks valued at more than EUR 10,000) there are now proportionally more competitive bids in France than in the US — in this price bracket, 53% of lots exceeded their high estimates in France, compared with only 42% in the US. In the first half of 2000, before the crash in the stock market, 46% of US lots estimated at above EUR 100,000 beat their high estimates, while in the same period in France the percentage was just 43%.