The state of the global ART MARKET
extrapolated from the annual report “Art & Finance Report 2017,
“Art market return recover in the last 12 months, Artnet art price indices see positive return between April 2016 and April 2017, with Impressionist Art and Contemporary, accounting for the highest annual returns of 10.50 percent and 7.54 percent respectively.
Many of the collector, mangers, art professional, said that the art market needed to modernize its business practices to meet the expected standards of a transparent, trustworthy and developed marketplace. The new rules could enter into force as early as 2019 and are part of a broader plan to figh terrorist financing. The new rules consistency and clarity on the types of restrictions and control measures proposed by the European Commission in tackling the illicit trade in cultural objects.
Exixt a new approach to art and wealth management needed, more dynamic, sophisticated to managing art-related wealth is required in the future. The total number of ultra-wealtthy individuals is predicted to rise 43 percent by 2026. Technology is increeasingly playing a key role in the evolution of the art market. Art startups (artechs) are building new digital business models aimed at enabling and supporting traditional art businesses. Online art sales continues to grow, traditional art businnesses take up the online challenge. Growth in the last two years has picked up among the traditional auction houses. Sotheby’s grew its online business to US$155 million-an increase of 19 percent in 2016-and Christies’s increased its online activities by 34 percent from US$162 million in 2015 to US$217 million in 2016. Total auction sales at Sotheby’s, Christie’s and Philips were up 18 percent in the first 2017 compared to the same period last year. Auction and dealer market converge online. New technology could transform parts of the art industry, by resolving questions of provenance and improving trasparency, copyright and ownership issues.
New York auctions bounce back in the first half 2017 after a challenging 2016. Christie’s, Sotheby’s and Phillips post war and contemporary sales in New York raised US$1.57 billion in 2016, wich was down 30 percent compared to 2015, when auction sales totaled US$2.25 billion. However, the first 2017 shows that this market has recovered from its 2016lows, with total sales in New York in may between Christie’s, Sotheby’s, and Phillips up 27.9 percent from may 2016 and 32 percent above the results from november last year. This result reinforces the global art market recovery that started during London auctions in march 2017. Auction market increased slighty to 68.3 percent in 2016, up from 65.7 percent in 2015. However in the first six months of 2017 show that New Yorks’s market share decreased to 65.6 percent as London took a larger share of auction sales. In 2017 signaled strong interest in lost worth in excesss of US$5 milion, wich accounted for 71,1 percent of total sales value. Expert signal a more upbeat outlook for 2017-18.
European art market outlook look positive,36 percent of the experts surveyed believe that the European contemporary art market will see a positive development in the next 12 months. In Italy a new reform aimed at the existing Cultural Heritage Code is set to improve Italy’s competitiveness in the international art market. Paris, Milan and Amsterdam have seen a positive trend in the first 2017 with a total of US$105.3 million in sales, accounting for 70 percent of total sales in 2016. Gained market share in the auction market for post-war and contemporary art. Paris increases its market share, further estabilishing its position as the main art market hub on th.e European continent.
London sales drive the 2017 art market recovery, in 2016 returning to levels last seen in 2010-2011. Total auction sales fpr 2016 were down 41 percent from the previous peak year 2015. However, the sales total in march 2017 was 54.1 percent higher than in february 2016. This positive trend continued into june 2017. Sotheby’s overtakes Christies’s and Phillips gains further market share. Negative to neutral outlook for the London post-war and contemporary art market in the next year. Brexit could have a negative impact on the UK contemporary art market in 2018. 38 percent of buyers think that the market will come down in the next 12 months, Buyers of outsider Europe to take advantage of the benefits of a lower exchange rate.
Chinese contemporary art market outlook turns neutral to positive. 2017- 2018 signals that the market is getting more positive compared to 2016. 32 percent believe that the chinese contemporary art market will go up in the 12 next months. China focus on building a regulated art market. The chinese goovernament attaches great importance to the development of cultural projects. According to Asia Institute of Art and finance (AIAF), the governament has emphasized the healthy and regulated development of culture and the art market through the introduction of new polices. In recent years international auction houses have shifted their focus from Chinese contemporary artist toward artist from Japan, South Korean and Southeast Asia. Many of the biggest contemporary art dealers in the word have been chanpioning japanese and korean art in the last year.
Sentiment in the South Asia modern and contemporary art market turns from positive to neutral in the first half of 2017. Was affected by the global downturn in 2016 and is struggling to gain momentum. Modern art dominates but the contemporary south asian art will receive more mouseum exposure in 2017. Indonesia is the strongest sector in 2016 and continue to dominate the region’s art market with 48.8 percent market share based on total auction sales at Sotheby’s and Christye’s. Vietnamese art comes in third position with 16.2 percent market share.
Uncertain outlook for the Latin American art market, the experts think the market will go down in the next 12 months. Mexican and colombian artists gain market share in the first 2017. During the Latin America auction in New York in May, artist from both Mexico and Colombia increased their share of overall sales. Mexican artists accounted for 31.8 percent of the total sales value, followed by colombian artist accounting for 24.4 percent of total sales. Latin America’s population is forecast to grow by 37 percent between 2016 and 2026, with Mexico’s population predicted to grow by 40 percent, Brazili’s by 20 percent and Colombian’s by 30 percent over the next 10 year.
Also the Middle Eastern art market will predict a decline. Wars, terrorism and geopolitical tension in the region were cited as the main reasons for this. Sotheby’s open a new office in Dubai and looking to cater for the new local clientele and in november was opened a new Louvre in Abu Dhabi. Art and Islamic Finance hasthe potential to make a good underlying asset, an increasing interest in the region around art as an asset class, there are opportunities for banks and investiment houses to address the needs and opportunities associated with art financing investiment in the region.
The Russian art market sees a positive start to auction sales in 2017, but experts remain cautions about its outlooks. Russian modern and contemporary art sales decreease by 4 percent in 2016, in 2015 the market dropped 63 percent.Sotheby’s dominates the Russian art maket.
African art auction market sees significant growwth in 2017, sales have accelerated this year as Sotheby’s launched its first African modern and contemporary art sale in May 2017in London. London consolidates its position as the venue of choice. The international auction house Bonhams now holds its renowed “AfricaNow” sale (focused on African contemporary art). Sotheby’s London joined the Afdrican art auction trend 2017 with its first auction focused purely on African contemporary art. It achived total sales of over US$3.6million and 79 of the 116 lots were sold.”
download the report: www.deloitte-artandfinance.com