The contemporary art sector has never been so competitive or speculative than in the 2013-2014 period, which saw a work by Jeff Koons fetch €38.8 million, a record number of auction sales reaching the million dollar/euro threshold and a record auction turnover for a Post-War and Contemporary Art sale.
These are key findings of the new 2013/14 contemporary art market report from Artprice, a leading producer of at price and art index databases.
Artprice’s eighth exclusive report on the contemporary art market, it draws on information from 4,500 auctioneers. It shows that in four, the global turnover achieved in the sale room, irrespective of period, has almost doubled since the slowdown of 2009/2010: a period that registered a price drop of 48%.
Overall, the year July 2013 – July 2014 was a record-breaking year for the Contemporary Art market, with revenues smashing the US$2 billion mark, states the report.
“Affluence has not been slow to return, buoyed up by a market structure that has changed significantly in many respects, including the increased globalisation and dematerialisation of sales,” says Thierry Ehrmann, the CEO and founder of Artprice.
“The galloping speculation of the period between 2004 and 2007 is once more to the fore and the contemporary market is more affluent than during the micro-bubble of 2007: a year of rocketing prices, with revenues for the year up by 50% for a similar number of works sold.”
He said that a new peak was achieved this year – the best in the history of contemporary art at auction in terms of auction turnover, price rises and record bids.
The price index of artists born after 1945 has followed the trend, reaching unprecedented heights and even topping the levels attained at the height of 2007 by 15%. All in all, the global index of contemporary art prices has risen by over 70% over the decade.
“The art business is flourishing in a bubble that never bursts, and in continuing growth as regards works at the very top end of the market,” says Ehrmann. “This year, the high-end market acclaimed 13 contemporary works with prices of over €10 million, and designated the most expensive work in the world: a giant Balloon Dog by Jeff Koons, sold for over €38.8 million.”
He said that the most speculative names in art – considered safe investments by some despite the sector’s volatility and wild fluctuations in price – are driven by powerful trendsetting gallery networks, curators and purchasing consultants, and by various leading players in the art market, of which the leading auction houses form an integral part.
“Prosperity depends simultaneously on tried-and-tested mechanisms and the voracious appetite of investors bidding from all over the world,” he said. “The contemporary art market has become an economic UFO with the globalisation of demand, which involves the arrival of extremely rich investors en masse.
“Attracted by the diversification of investment and exceptional yield rates, demand has increased substantially, meaning that five times more works are sold today than 10 years ago, at price levels that bear no comparison.”
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