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Thursday 4 December 2008

The ideally expensive thing

Susan Moore on how the Americans have become net sellers of works of art

Long in danger of turning into a sleepy market backwater, London has been revived as a great international art entrepot. As the British government is only too aware, it has also become the preferred place of domicile of a significant number of the world’s newest rich — or at least the place in which they keep their works of art. (Given the draconian export laws in their own countries, most Russian and Indian collectors choose to buy and keep their art overseas.) In fact, probably not since the likes of John Pierpont Morgan (son of Junius) and Henry Clay Frick assembled their picture collections in London to avoid the 20 per cent US import tax on works of art (books were excluded) has the capital offered refuge to so many distinguished foreign collections.

The main difference between now and the mid-20th century, however, when London was at its height as an art market, is the scale and breadth of the market itself. Never before have so many people from so many places around the globe competed to buy works of art. The art market is no longer simply international but global, and it is expanding at an extraordinary pace. Five years ago, for instance, Sotheby’s top clients — those spending over $500,000 — originated from 36 countries; now they come from 58. The TEFAF report records the market’s recent growth in terms of both transactions and value, the latter an astonishing 95 per cent between 2002–6 and rising from a global value of 26.7 billion euros to a record 43.3 billion euros. Striking, too, is the fact that China has now ousted Switzerland from its long-time ranking as the world’s fourth largest national art market, and is just 1 per cent behind France in terms of market share. Its domestic auction market grew by a staggering 983 per cent between 2005 and 2006.

Clients from these emerging markets are being carefully nurtured by the world’s leading auction houses and dealers. Christie’s, for instance, has pioneered sales in mainland China and Dubai. Buyers from Russia, China, the Middle East and India accounted for 20 per cent of Sotheby’s turnover last year. In what is in effect another sea change in the market these buyers are moving on from acquiring only their own art, with the Russians already making a significant impact on a range of key international markets, from jewellery to Impressionist, modern and contemporary art, Old Masters and furniture. Jussi Pylkkanen, president of Christie’s Europe, estimates that Russians are now spending twice as much in other collecting areas as they spend on Russian art. ‘They have a tradition of collecting, and they have the confidence to buy at the top level,’ he says. ‘Like many new collectors in Asia and the Middle East, they don’t look at benchmarks set by previous sales.’

More articles from: Susan Moore | this section

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