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With Financial Crisis a Distant Memory and as Art Market Booms, Some See the Risk of Bust
A Sotheby's employee poses with David Hockney's "Hotel L'arbois Sainte-Maxime" at Sotheby's Auction House in London. The piece is to be auctioned as part of the forthcoming Contemporary Art sale on February 15, 2011 and is estimated to reach $2.3million). REUTERS/Luke MacGregor.

By: Mike Collett-White

LONDON (REUTERS).- At the top end of the art market, the financial crisis seems a distant memory -- surging prices saw Christie's and Sotheby's post impressive 2010 results that were back to, or above pre-crisis levels.

Yet while the market leaders are confident the recovery from 2009's deep slump can be sustained, the prospect of speculative money pouring into art, driven partly by rich Chinese investors, increases the risk of boom and bust, some analysts believe.

"This bull market trend could go on for some time, supported by China's rising class of super-wealthy, but eventually the bubble will burst, as it did in Japan in the early 90s and the global art market crash in 2008," ArtTactic said in its latest analysis of the contemporary art market.

"Too much speculative money will push art prices beyond their long-term, intrinsic art historic value, and it will become a game of who's the Greatest Fool."

The research company said it believed more "hot" money, lured by recent spectacular gains, would enter not only emerging markets but also established Western markets too, with Andy Warhol paintings a prime candidate for further speculation.

"We will experience mini-booms and busts more frequently than in the past as speculators move in and out of different markets trying to cash in on the latest trend," ArtTactic said.

"We see 2011 being the start of this new era, where art is increasingly moving from a collectable asset toward a financial asset."

PICASSO AND GAUGUIN LEAD
Over the next two weeks in London, the two big auctioneers are offering works worth around $650 million at impressionist and modern, surreal, and post-war and contemporary art sales.

While New York is still the art market hub, London is not far behind and an increasingly international client base, plus the rise of internet bidding, means the February sales should give a fair picture of the state of the global art market.

Jussi Pylkkanen, president of Christie's Europe, said he was confident going into 2011 that the strength of the market was sustainable and that there was room for further growth.

The number of new clients who registered for a sale at the world's largest auction house last year rose 23 percent on 2009, and the number of people who bought an item was up 13 percent.

"It's that rise of new registrants which really for me signals both sustainability and actually further potential growth," he told Reuters in a recent interview.

"This new influx of buyers ... continues to grow, and that really is the vital piece for me," he added. "I am very comfortable that it is sustainable."

As long as prices remain high, experts argue, top quality works will continue to come on to the market, creating a cycle that is vital to the market's future expansion. A knock in confidence hits supply just as much as demand, they add.

Christie's posted record annual sales of 3.3 billion pounds ($5 billion) in 2010, up 53 percent on 2009. Sotheby's boasted an auction total, not including private sales, of $4.3 billion in 2010 versus $2.3 billion in 2009.

The next test for the market comes on February 8 at Sotheby's, with impressionist and modern works worth 56-79 million pounds going under the hammer. Among its star lots is Pablo Picasso's "La Lecture" of 1932 valued at 12-18 million pounds.

The following evening, Christie's opens its account at an auction valued at 55-81 million pounds (excluding surreal works) that includes a still life by Paul Gauguin in tribute to Vincent Van Gogh estimated to fetch 7-10 million pounds.

It was at the equivalent sales in 2010 that Sotheby's broke the auction record when a Giacometti statue raised $104.3 million. Months later, Christie's sold Picasso's "Nude, Green Leaves, and Bust" for $106.5 million in New York.

(Reporting by Mike Collett-White)





Today's News

February 3, 2011

Art Historian Silvano Vinceti Claims Male Model Behind Leonardo da Vinci's Mona Lisa

National Gallery Presents Historical and Scientific Studies on Degas Sculpture Collection

Israeli Archaeologists Find a 1,500-Year-Old Byzantine Church Southwest of Jerusalem

INAH Researchers Find 8 Camps Occupied by Nomadic Groups, Some of Them, 8,000 Years Ago

Art Institute Presents Works by Celebrated Swiss Contemporary Artists Peter Fischli and David Weiss

With Financial Crisis a Distant Memory and as Art Market Booms, Some See the Risk of Bust

Historic, Three-Year Preservation Project Restores The Landmark Façade of the Library On 42nd Street

Auschwitz Decays Due to Age and Mass Tourism, Prompting Preservation Effort

Mid-Career Overview of Vicky Civera's Work at the Valencian Institute of Modern Art

Anri Sala's First Solo Exhibition in Canada Opens at the Musée d'art Contemporain de Montreal

Solo Exhibition of New Paintings and Works on Paper by Robert Zandvliet at Peter Blum Gallery

World's First Museum Exhibit Dedicated to Women Who Rock Opens at the Rock Hall this Spring

Exhibition of Polish Design 1955-1968 from the Collection of the National Museum in Warsaw

First U.S. Solo Museum Show of Gabriel Kuri at the Institute of Contemporary Art in Boston

Collection of Contemporary Bengali Scrolls Leave Liverpool to Tell Tales from India

John Miller Awarded the Wolfgang Hahn Prize

Posing Beauty: African-American Images from the 1890s to the Present at Newark Museum

Generali Foundation Presents "unExhibit", an Exhibition by International Artists

Homage to Yosl Bergner: Illustrations to Franz Kafka's Oeuvre at Tal Aviv Museum of Art

University of Pennsylvania Museum Removes Mummies After China Objects

Hungarian Revolutionary Posters and Plywood Featured in New Exhibitions at MoMA

Dual Exhibitions Present Changes in Urban Life and Photography Over the Last 60 Years

International Museums on High Alert for Looted Ancient Egyptian Artifacts Due to Crisis

Ryan O'Neal Donates Farrah Fawcett's Red Swimsuit to Museum of American History

Ten Museums in Running for £100,000 "Museum of the Year" Art Fund Prize 2011

Leading Contemporary Figurative Painter John Wonnacott Exhibits at Agnew's

Studio Museum Launches Two New Initiatives: Studio (un)framed and Studio Lab

First "Bat-man" Comic Proof Pages, Saved from the Trash in Queens, Highlight Comics Event at Heritage Auctions

Most Popular Last Seven Days



1.- Newly discovered Van Gogh sketchbook to be published

2.- Portraits of the Duchess of Cambridge from British Vogue centenary issue acquired by National Portrait Gallery

3.- Foam presents spectacular exhibition of work by Helmut Newton

4.- After 30 years "hidden in plain sight," still life painting is identified as a Gauguin; artwork is highlight of sale

5.- Smithsonian releases Learning Lab for everyone to use museum resources

6.- Angst and deep pockets show state of art market in 47th edition of Art Basel

7.- Christo exhibition falls victim to own success

8.- Sotheby's London Impressionist & Modern Art Evening Sale totals $151.9 million

9.- The National Gallery explores great paintings from a unique perspective

10.- Thyssen-Bornemisza Museum explores Caravaggio and the painters of the north



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