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Jeddah - Yasmine El Tohamy - BERN: Even the high-end art market was less frothy in 2020 than 2019 due to restrictions placed on galleries, auctioneers and collectors by the coronavirus disease (COVID-19) pandemic.
Still, fine art remained big business and sold well. The top 10 sales at auction fetched a total of $453 million. In that group, only two paintings exceeded the $50 million mark in 2020, while nine out of the ten lots topped $50 million in 2019.
The numbers may be smaller but they are eye-watering nonetheless. Even pop art sold: A drawing by Belgian artist Herge depicting his character Tintin sold for $3.1 million at auction earlier this month — the highest price ever paid for comic book art.
Big name galleries, auction houses and exhibitions like Art Basel or Miami adjusted to the “new normal.” Sales at auction houses went online, and viewing experiences, as well as auctions, were enhanced by augmented reality and super-zoom technology.
Telephone bidding had become ingrained in the auction process for some time, but COVID-19 pushed the virtual presence further. A trend that would have taken place over time anyhow was accelerated by the pandemic.
The eastward shift of economic power was also pronounced. Hong Kong replaced London as the second biggest market for high end auctions. According to ArtTactic, the city state’s market share in 2020 auctions was 23.2 percent up 5.7 percent from 2019. New York remained the dominant force with 41.6 percent.
A further trend which was exacerbated by the lockdown throughout the world was that buyers increasingly see luxury on par with art. The Boston Consulting Group noted that the auction market for second hand luxury goods achieved a total value of $23 billion — growing by 8 percent per year.
The above makes eminent sense, as investors are scrambling to find a store for value amid historically low interest rates. The Financial Times listed several alternative investment categories while money is trying to find a home amid low returns, including everything from whisky to one’s own backyard. High-end art also has a place on that list.
Like in the music world, the art world is also bifurcated. On the one hand, there are big-ticket investment pieces and the big auction houses, galleries and exhibitions who all successfully went online, and whose affluent buyers are eager to diversify their investment portfolios while returns are hard to come by.
But on the other hand, there are the smaller galleries and lesser-known artists who are struggling. They might have gone online, too, but have not found the resonance of their high-end colleagues. Worse, in many countries, there are no pandemic schemes for artists. They do not receive compensation for lost revenue comparable to employed workers, who can avail themselves of furlough schemes.
This holds true even in very affluent markets. In Switzerland for example, 50 percent of all galleries may face closure according to Heidi Leupi, who together with her husband runs Leupi Art, the market-makers for Middle Eastern art in the Alpine country.
This is a grim outlook, and it matters for the art market in the long run. Artists evolve; they are not born with the fame of a Damian Hurst. It takes the nurturing of these smaller galleries and their clientele to tease out who the next big name will be.
Anybody in business can tell you that succession planning is critical for companies, and with it, the markets they make up. If we believe in that axiom, we need the smaller galleries to give the many a chance to become high earners. The art market will be a lot poorer without the opportunities that segment provides for up-and-coming talent.
- Cornelia Meyer is a Ph.D.-level economist with 30 years of experience in investment banking and industry. She is chairperson and CEO of business consultancy Meyer Resources. Twitter: @MeyerResources
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