Compared with other industries, the art market is notoriously difficult to quantify. The majority of sales are traditionally conducted privately, and discretion has traditionally been one of its foundations. Today, with growing interest towards art not just with general public, but also within financial organisations, funds, sponsors, growing number of collectors, journalists – such studies begin to emerge.
The most notable today probably are: An Art Basel & UBS Report, focusing on current trends; Deloitte and ArtTactic Art & Finance Report, analysing profitability of art as an investment; and TEFAF (The European Fine Art Foundation) Art Market Report, studying the structure of the market and its changes from year to year.
Figures in these studies may slightly differ, but always remain impressive. And what’s of most interest – the trends are generally are very similar. So let’s have a look some of them.
According to Art Basel & UBS, the turnover of the art market, after two years of decline, has in 2017 increased by 12% and reached $ 63.7 billion. The US is responsible for almost a half of the global market (42%), its volume increased in 2017 by 16% to $ 26.6 billion, followed by the Chinese market (21%) and the UK (20%). The main trade in contemporary art is concentrated in the four largest centres: New York, London, Hong Kong and Beijing. They account for 83% of the world’s auction sales, although only 20% of the lots sold actually remain in these cities. Sales in 2017 increased in all regional markets, which in the face of political and economic instability is undoubtedly encouraging.
Sales growth in all regions is observed exclusively in the segment of the most expensive work. Which means that the gap between the state of affairs in the upper price segment of the art market, where prices continue to break records, and the rest segments, is growing bigger and bigger. The share of auction sales in 2017 amounted to 47% of the global art market. Notably, only works worth over $ 1 million accounted for this growth, constituting 64% of the auction volume, but only 1% of all transactions (and 1% of 52 105 artists represented at the auction).
Over the past 5 years, despite the fact that all other segments (auctions, art fairs, etc.), fluctuated significantly, online market continued to grow steadily (72% overall). In 2017, it grew by 10% compared with the previous year, and was estimated at $ 5.4 billion. The majority of transactions (65%) were worth up to $ 5 000. Most traditional dealers and auction houses note that this channel is the most promising for growth in the next 5 years.
The numbers also expressively show the changing tastes of collectors. For example, the old masters market grew by 64% solely due to a record and completely unprecedented sale of the “Salvator Mundi” by Leonardo da Vinci, for $ 110.5 million in May 2017. Without this deal, we would have seen a drop of 11%.
Salvator Mundi by Leonardo Da Vinci before the auction, October 2017.
Proportionally, Modern Art remains the largest segment of the art market. However, the market share of contemporary art (traditionally attributed to artists born after 1945), grows at a higher pace than post-war art: in 2000, contemporary art accounted for 3% of the world’s auction art market, and 17 years later – already for 15%.
It is also indicative that more and more contemporary artists are being sold at auctions. In 2017, 20 335 artists sold at least one work at auction, which is 18 percent more than in 2013/2014, and 5 times more than in 2000/2001, when only 4,100 contemporary artists had auction sales. From the marginal, insignificant segment, contemporary art is becoming one of the main locomotives and certainly the busiest segment of the art market.
This is no doubt encouraging, and primarily due to the increasing attention to contemporary art worldwide, as well as the enormous financial potential of work at a much lower “entry threshold”, which attracts new collectors. The average price for a work of contemporary art has grown over the year (2016-2017) from $ 26,160 to $ 27,600.
The price index of modern art, which for the period from June 2017 to June 2018 grew by 18.5 percent (according to Artprice), is also telling on the investment potential.
Art Price Index by period of creation
Works created by contemporary artists and sold in 2016/2017, showed an average annual income of + 7.6% over the 8 year period. The profitability of more expensive works of course gives better odds than the rest of the market (lots, sold for more than $ 50 thousand, representing 6% of the total volume of transactions). For instance, from January 2000 to July 2017 works on canvas by Jean-Michel Basquiat brought a total yield of + 1000%, while his graphics showed a profit level of 560%, and prints only 4%.
The value of the work of a contemporary artists is constituted by several factors. Education, solo exhibitions, participation in large projects and residences, presence of works in art institutions, auction sales, availability of publications (albums, catalogs, press), collectors’ enthusiasm – are among very important factors that influence the price. Therefore, prices for contemporary art are developing at an even more irregular trajectory, with the most unpredictable turns.
For example, “Doing Well” by the German artist Wolfgan Tillmans, sold for the first time in 2005 for $4,439, was sold at Christie’s in 2018 for $71,456. And the work of Ugo Rondinone, sold for the first time in 2005 for $12,000, went for only for £1,598 in 2018.
Wolfgan Tillmans, Doing well , 2001, c-print, 60 x 50 cm. (23.6 x 19.7 in.)
It is noteworthy that in 2017, art came in first place with a large margin in terms of price dynamics among luxury items, having overtaken the traditional objects of investment – watches, retro cars, wine, etc. (according to the results of the international a study by Art Market Research conducted by Knight Frank.)
Russian art market, although continuously developing, still leaves much to be desired. From the avant-garde start of the 20 th century, it practically moved to the rearguard – in many ways, and because of the many economic, political and historical reasons.
During the twentieth century, the market simply could not exist, under the pressure of the soviet state. Artwork could only be bought through the “commission of art”, which dealt exclusively with Social Realism. Contemporary Art Russian market hasn’t emerged until the late 80s of the past century, when artists gained more freedom, the first private galleries appeared (“First Gallery” by Aidan Salahova, “Regina” by Regina and Vladimir Ovcharenko, XL Gallery). This was followed by a Russian auction “boom” at Sotheby’s in 1988.
Yet today Russian contemporary artists are still strongly “under-represented” in the world, their names cannot be found in the top 20, nor in the top 50 works of contemporary art. Russian Contemporary Art market value in 2016 – 2017, as estimated by InArt, amounted to € 20.3 million (revenue from all sales of works by Russian artists around the world. Estimated sales in 2018 also show a positive trend, and preliminarily estimated at € 22.41 million.)
Kabakov, Bulatov, Pepperstein, Moscow conceptualists – remain the headliners of the Russian Contemporary Art market. Prices for their work reach several million dollars. The interest in 1950s – 1970s nonconformists remains on a high level, as well as the works of dissidents of the sixties and seventies, and the “official” Soviet art, fuelled in 2017 by a series of exhibitions in the largest cities of the world, to coincide with the centenary of the October Revolution. In 2016–2017 the New York Museum of Modern Art held a large exhibition of the Russian avant-garde. British Royal Academy of Art showed Russian avant-garde and social realism in the Revolution Russian Art exhibition (1917-1932).
Prices for the so-called current works of Russian contemporary art remain relatively modest.
Top 10 most expensive works of contemporary art (2018 estimated Art Investment)
|1||Guryanov, Georgy Konstantinovich||
98 840 USD
|2||Dubosarsky V.E. | Vinogradov A.A.||
86 485 USD
68 750 USD
|Painting Spell 2|
|4||Novikov, Timur Petrovich||
49 001 USD
|5||Tsoi, Viktor Robertovich||
36 168 USD
|6||Golosiy, Oleg Nikolaevich||
32 668 USD
|7||Peppershtein, Pavel Viktorovich||
32 668 USD
|Untitled (Funny pictures)|
|8||Novikov Timur | Kotelnikov Oleg||
24 710 USD
|Leningrad – Stockholm|
|9||Zvezdochetov, Konstantin Viktorovich||
23 334 USD
|Black cat, white crow|
23 192 USD
Dubossarsky, V.E., Vinogradov, A.A., Natasha, 2010, oil on canvas, 195 х 390 cm (two parts)
However, the situation is changing, and changing for the better. With the dynamic development of contemporary art in Russia, the emergence of incredibly interesting, original artists, the opening of new private galleries of contemporary art, the emergence of the first fair of contemporary art, Cosmoscow, and the growing interest in contemporary art in Russia, there are good chances that interest toward Russian Contemporary Art will increase in the world.
Sotheby’s, Christie’s, Bonham’s and MacDougall’s, the the largest auction houses in London traditionally hold Russian Art auctions twice a year, in late spring and late autumn. Collectors, dealers and lovers of Russian art from around the world come to London for these 2 weeks. Other events, associated with Russian art, also traditionally, happen in London around the auctions, which are formed into informal, but large-scale “Week of Russian art.” Notably, most of the works presented during these weeks are usually from the period between XIX to the middle of the XX century. In 2018 the main interest remained with such names as Shishkin, Repin, Deineka, Feshin, Aivazovsky, Kandinsky and Malevich. Alexander Yakovlev’s, “The Dancer in Spanish Costume”, created a stir, and sold to an anonymous collector for £ 1.1 million pounds, which exceeded the estimate almost 2 times.
In the past few years, despite the economic and political instability, more and more initiatives emerge that bring Russian Contemporary art to the fore. Thanks to the cooperation of Russian philanthropists living in London, Igor and Natalia Tsukanovs with the Satchi Gallery in London – one of the most prestigious and authoritative institutions of contemporary art in the world, more and more young Russian artists are showing there. In 2017 the exhibition “Art Riot: Post-Soviet Actionism”, also devoted to anniversary of the October Revolution, featured work by the so-called Russian protest movement, including Pussy Riot, Oleg Kulik and Peter Pavlensky under the supervision of Marat Gelman. It was the fourth exhibition of contemporary Russian art in Saatchi, which is organized by the Tsukanov family fund.
Tate Modern showed two exhibitions in 2017, dedicated to the revolution – “Not Everybody Will Be Taken Into the Future “ by the Moscow conceptualists Ilya and Emilia Kabakov, and Red Star Over Russia – posters, photos and graphics by Russians artists from the collection of an English art patron David King. The museum now also has a committee for the selection of art from Russia and Eastern Europe, and is involved in actively buying Russian young artists.
Buying modern contemporary art is not all about acquiring an object, it is essentially an investment in the development of contemporary culture, a contribution into the formation of future trends. Of course, one should always buy works that resonate and bring pleasure – both aesthetically and intellectually. And with the contemporary art market developing dynamically, it can be an unprecedentedly profitable investment.
Moreover, today it is much easier to buy art – more and more galleries have an online presence. Technology today allows you to “try on” the work in your interior, and most galleries offer free returns. For example, if you live in London, where contemporary Russian artists are represented very humbly, today there are no obstacles to start collecting their work.
Original textL Anna Glinkina, in Russian UK Magazine, issue 45, https://en.calameo.com/read/0051848296b4ca03cd5c2