Art prices start to rise again
After five months of consecutive falls, art prices are beginning to rise again as buyers regain confidence and auction houses learn to adapt to a leaner spending environment.
By lowering their expectations, the auction houses have supported a market of more affordable works. Nearly 80% of sold lots fetched less than €5,000 during the first half of 2009 versus 73% in 2008, according to art information provider Artprice.com.
The share price of Sotheby's, the New York-listed auction house, has tripled over the last five months after it plummeted to an all time low of $6.75 at the beginning of March. Last week it hit $17.25, although it has since dropped slightly to around $16.42.
Confidence in the auction house may have been boosted by the fact that both Sotheby's and rival Christie's announced at the end of last year they would no longer provide guarantees on most works of art at auction.
Confidence is clearly returning to buyers, many of whom buy art as a tangible investment.
Artprice’s art market barometer rose 4.97% in the second quarter of 2009 after a fall of more than 30% since the beginning of 2008, as talk of green shoots in the economy this year boosted the morale of art market players.
However some areas of the art market, that became over inflated over the last four years with speculative bidding, are still losing value.
Prices for post-war and contemporary art are still adjusting, having fallen 9% and 4% in the second quarter of 2009. As the two most speculative segments of the art market between 2005 and 2008, they have been the most affected by the crisis, and since the market's peak last year have plummeted in price as much as 40%.
Chief executive of Artprice Thierry Ehrmann said in his latest report that contemporary works bought at very high prices a year or two ago are unlikely to be presented for auction in the current context.
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