There is no doubt that the art market in 2017 will long be remembered for a single transaction; the sale of the ‘Salvador Mundi’ presented by Christie’s as ‘the last da Vinci’ remaining in private hands. It sold at the Post-War and Contemporary Evening sale in November for a staggering $450 million – almost tripling the previous record price for a work of art sold at auction.
While this record-shattering sale might suggest that the art market has never been stronger, the reality is much more complicated. In 2017, as with previous years, the top end of the market has shown itself to have a life of its own; a very small number of sales at the highest price levels generate a huge proportion of market’s turnover, as well as the headlines, while the vast majority of transactions occur at much lower and lesser-observed levels.
At the top end, money continues to flow into the market as new buyers, including a significant number from Asia, are attracted by art’s asset-appeal and encouraged by low interest rates. This has led to a ‘masterpiece market’ that is quite distinct from the traditional collector’s market. In 2017, this ‘masterpiece market’ was given a further boost by a rebound in the number of quality consignments, following a dearth the previous year amidst the backdrop of Brexit and the US elections.
At the outset, this makes 2017 look like a spectacularly successful year. Aside from the record-smashing sale of the ‘Salvador Mundi’, signs of success include Sotheby’s global auction totals for the year which are 13% up on the previous year. Christie’s have yet to give an indication of their sales, but they are likely to have seen an even greater increase in turnover, not least as they can add $450 million for one painting alone.
There were many other remarkable moments in 2017 including the sale of Jean-Michel Basquiat’s Untitled (1982) which sold at Sotheby’s in May for $110.5 million – a record price for any American work of art. It was acquired by Japanese collector Yusaku Maezawa who had also acquired the previous ‘record’ Basquiat for $57.3 million the previous year. This is an artist whose star has soared; the first $20 million price for the artist was set as recently as 2012. In October in New York, another staggering and landmark price was set with the sale of ‘Paul Newman’s Rolex Daytona’ at Phillips in New York. It is quite rare to see a wristwatch sell for over $1 million, and a Rolex only achieved this feat for the first time as recently as 2016, yet this storied watch sold for $17.7 million. Motor cars is another category which has seen a big climb in values in recent years, illustrated in August 2017 when Bonham’s sold a 1997 McLaren F1 for $15.6 million – a record for the marque, and a price that six years previously would have been a record for any motor car at auction. Such has been the strength of this market in recent years, it now only just sneaks into the top 20 prices. Perhaps even more staggering than the cars and watches, last year saw Sotheby’s sell four of the top five most expensive jewels ever offered at auction, including ‘The CTF Pink Star’, a 59.60-carat diamond which sold for an eye-watering $71.2 million.
It would be easy to assume that 2017 was a year of unprecedented success for the art market but aside from the buzz of record-breaking sales, there were reminders that even the ‘masterpiece market’ cannot be taken for granted. This was most striking in October in London when Christie’s offered Francis Bacon’s much hyped Study of Red Pope, 1962. 2nd version, 1971 with an estimate of £60 million to £80 million. Most unusually, it was offered ‘naked’, or free from any financial guarantee (3rd party or otherwise), and it crashed on the night, failing to attract a winning bid. A few weeks later in Geneva, Sotheby’s offered the ‘Raj Pink’, a 37-carat diamond with an estimate as much as $30 million which also failed to sell. At this level of the market, financial guarantees have become the norm, often turning major evening auctions into slightly surreal, and usually boring, spectacles of trading. Given these two major failures, and that the ‘Salvador Mundi’ was guaranteed by a third party who would seem to have made a 9-figure profit in less than half an hour, they’re only likely to become more so; the top end of the art market has become an increasingly complicated financial environment.
Is it possible to see some of the success at the top of the market trickle down to lower levels? And does the success of the masterpiece market mean the whole market is thriving? Once again, 2017 has suggested an element of caution. Sotheby’s auction sales might have gone up 13%, but they had dropped over 30% the previous year. It seems not a month has gone by without an important mid-level art gallery shutting its doors as collectors gravitate to art fairs, while the strongest mega-galleries thrive. And in March 2017, Christie’s caused a major shock when they announced that they would be closing their saleroom in South Kensington, a much-loved destination for collectors since the 1970s, and a place where lower price points continually attracted new collectors into the world of art and antiques.
In 2017 the art market has continued its trend of recent years; the very top end attracts increasing amounts of money, and trophy works of art can soar to ever-greater heights, while the majority of the market continues with a greater sense of rationality and caution. Overall, we can be encouraged that demand remains fairly consistent for the best on offer, and that sensible estimates continue to attract competition in the saleroom, with the rarest and the best always selling well. This is a trend we have seen across the board as we carry out our annual survey of the global art market, which is a key process of our annual updating service for valuations and appraisals, and which looks at market data for over 50 categories of art and collectibles.