A Buyer’s Market: Total Amount of Successful Bids for Korean Art Auction Market in 4Q 2022 Decreased by 61%, KAAAI Says

Recently, the Korean art auction market has turned to a buyer’s market where buyers have priority in price negotiations. However, even in this aspect, the demand for works by Lee Ufan, a world-renowned artist, still remains.

According to the Art Market Report 4th Quarter 2022 released by the Korea Art Authentication & Appraisal Research Center (KAAAI), the total amount of successful bids in the art auction market in the fourth quarter of last year was USD 2.3 million (KRW 25.02 billion). The figure is down about 61% from the same period in 2021. The number of works sold was 354, down about 53.5% from the same period in the previous year. This pattern was also evident at the last auction in December. At this time, there were no fierce bidding competitions or noticeable auction records.

As a result, the winning bids for Seoul Auction and K Auction, Korea’s two major auction houses, also fell by more than half from the same period in the previous year. KAAAI assessed that the Korean art auction market has already entered a period of adjustment. This is attributed to the global economic downturn and interest rate hikes in the second half of last year. The worsening buying sentiment also led to a drop in the winning bid rate. Analysts say that the market has turned to a buyer’s market. The cancellation rate of entries also more than doubled from about 2.5% in 2021 to 5.25% in 2022.

In this adjustment period, the KAAAI cited Lee Ufan as “the only blue chip that moves the stalled market… He is the surest card to choose the adjustment period first in the expanding art market, ranging from invisible distribution markets, partial investment and art trust funds to new types of investment platforms.”

This does not mean that Lee Ufan’s work performed particularly well in the Korean art auction market in the fourth quarter of 2022. In the fourth quarter of 2021, Lee Ufan had 34 entries and the total winning bid was $4.31 million (KRW 5.32 billion). In the fourth quarter of 2022, it fell sharply to 16 entries and $1.53 million (KRW 1.88 billion). This represents a difficult situation in the Korean art auction market. In addition, Lee Ufan’s work will appear at K Auction’s first auction in the new year. K Auction said 84 works worth about $6.5 million (KRW 8 billion) were to be exhibited at the auction in Seoul on January 18, 2023, including Lee Ufan’s From Line No. 77072 (estimated $570,000 to $800,000).

In the Korean auction market, overseas works also performed poorly in the fourth quarter of 2022. Approximately 115 works by overseas artists were submitted in the fourth quarter of 2022, with 61 winning bids (about 58.1% winning bid rate). The total winning bid was $4.16 million (KRW 5.14 billion). “In the future, efforts are needed to expand not only Korean collectors but also networks with overseas collectors,” said KAAAI.

Meanwhile, unlike the Korean auction market, the overseas auction market in the fourth quarter of 2022 partially recovered from sluggish sales in 2022 through a single collection. In particular, the Paul G. Allen Collection, which was sold by Christie’s in November of 2022, recorded the highest sale total for a single auction. The auction of Allen’s collection recorded a winning bid rate of 100%, with an auction total (including premium) of $1.62 billion (about KRW 2.11 trillion). The David M. Solinger collection auction held by Sotheby’s in November of 2022 also recorded more than $100 million in sales. However, despite the surprising sales record of a single collection auction, total sales in the fourth quarter of 2022 fell from the fourth quarter of 2021. Sales at Sotheby’s New York’s November evening sale fell 24% from May 2022 and 39% from November 2021. Sales at Philips New York also fell 40% and 2.8% compared to May 2022 and November 2021.