2023 First Quarter: Sales Fall Over 10% at Top 3 Auction Companies

Global auction sales by three companies, Christie’s, Sotheby’s, and Phillips, fell more than 10% year-on-year in the first quarter of 2023, a recent report showed. In addition, sales at Korea’s two major auction houses (K Auction and Seoul Auction) also shrank by nearly 60 percent during the same period. Some analysts said that the global art market could be worse than it is now depending on the economic situation.

According to the Art Market Report 1Q 2023 released by the Korea Art Authentication & Apparel Research Center (KAAARC), global auction sales at Christie’s, Sotheby’s, and Phillips were about USD 1.32 billion (including buyer premium), down 13.6% from about $1.52 billion in the first quarter of 2022. The figure is about 9.0% higher than in the first quarter of 2021, when the COVID-19 pandemic was in full swing, and about 5% lower than in 2019, before the pandemic.

The most noticeable point in the first quarter is the contraction of the London market. During 2023’s first quarter, London auctions were down about 31% from the same period last year. In the previous eight years, London has emerged as a market leader for the top three auction companies. In terms of market share, London’s fell sharply from 56.7% last year to 45.2% of total sales. On the other hand, sales in New York and Hong Kong increased. New York’s market share increased from 29% last year to 41% this year, and Hong Kong’s market share increased from 4% to 8.6%. Auction sales in New York and Hong Kong partially offset London’s sales contraction.

Post-War and Contemporary art ranked the highest in the auction share by art category, with sales of $439 million in 2023’s first quarter, accounting for about 33.3% of total sales. On the other hand, Impressionist and Modern Art recorded $307.2 million in sales in the first quarter of this year, down about 44.8% from the same period last year. The market share was 23.3%, down sharply from 36.5% the previous year.

The report pointed out the recent inflation and high interest rates, saying, “The era of easy financing and purchasing artworks at low interest rates has ended. The art market has entered a period of adjustment and will get worse in the future, so it is time to face the situation and draw up necessary strategies.”

The situation in the Korean auction market is not good. In the first quarter of this year, the total amount of successful bids of Korea’s two major auction houses, K Auction and Seoul Auction, were about $18.8 million (KRW 25.2 billion), down 58 percent from the same period last year. The total number of works sold also decreased by about 52% to 513 points, and the average winning bid rate was about 67%, down from about 83% last year. K Auction pulled ahead of Seoul Auction in both the total number of successful bids and the winning rate.

However, it was found that the antique and Korean painting sectors are firmly doing well. These sectors accounted for more than half (about 67%) of the nine major auction entries conducted in the first quarter, and the total winning bid amounted to about 23% of the 69 auction sales conducted in Korea in the first quarter. In particular, the growth of auction house My Art Auction was noticeable in the antique and Korean paintings sectors. Seven out of the top ten bids in the antique and Korean painting sectors were sold at My Art Auction.

“We need to pay attention to the potential value of the antique and Korean painting sectors and the possibility of market expansion,” the report said. “We can confirm that demand for Joseon Dynasty paintings and modern Korean painting is steadily flowing into the auction market.”

Meanwhile, the KAAARC pointed out the opacity of Korean auction houses in its report. The report pointed out the practice of privatizing the results of sales or revealing only the winning works on a company’s website. Accordingly, KAAARC said, “Sellers and intermediaries should have an attitude that should not confuse customers by providing correct and accurate information to consumers,” adding, “Korean auction houses should have a bigger blueprint with a sense of mission as producers to establish the right tradition of the Korean art market and contribute to art research.”