Cold Wind Blows in Global Auction Market: Big 3 Auction Houses Down 18% in Early 2023

Jonathan Feel
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Art auction sales in New York and London in the first half of this year decreased by more than 20% compared to the first half of last year. This is in line with a 18.2% drop in auction sales in the first half of the year for Christie’s, Sotheby’s and Phillips. Sales in Zurich and Geneva, on the other hand, grew more than 100% each.

According to a recent report (Art Market Report 1H 2023) by the Korea Art Authentication Appraisal Inc. which analyzed the trends and prospects of the domestic and foreign art market in the first half of the year, the total sales of the three largest global auction companies was about $5.81 billion (including buyer premiums). This figure is down 18.2% from about $7.11 billion in the first half of last year. However, it is 0.5% higher than the first half of 2021 and 2.0% higher than the first half of 2019 before the pandemic.

The report noted information about Bonhams in addition to the three biggest companies. Bonhams posted $552 million in sales in the first half of 2023. This is the best first-half performance in the company’s history, up about 32% from last year. The number of purchases by new buyers has increased by about 45%, and acquisitions of auction companies and effective digital strategies seem to have worked.

The report also noted that although the downward trend in the first quarter continued in the second quarter, the number of auctions and the number of winning works has increased. The number of auctions increased from 419 to 452 in the first half of 2023, and the number of winning works also increased from 51,073 (2022) to 53,100 (2023). The report attributed this result to the increase of active online sales. The average winning bid was $109,485, down from $139,173 last year. In contrast, sales of engravings and editions rose 22% from last year. The report said, “Overall, it is a result of the defense of purchase demand against unstable market conditions,” and explained, “Engraving and edition are areas with relatively low entry barriers for new consumers, which can be seen as in line with online sales growth.”

By region, sales in the New York and London auction markets totaled about $4 billion (about 69.0% of the total market). The figure is down 22.9% from the first half of 2022, down 22.0% in New York and 25.1% in London. In particular, London shrank about 31% in the first quarter from the previous year, but this effect was dampened when Sotheby’s London auctioned Gustav Klimt’s Lady with a Fan and hit a new record for the highest European auction price in June (£85.3 million). This painting was the last portrait left by Klimt and was found in his studio in 1918, when Klimt died. It marked the highest price for a Klimt work traded at auction. Previously, the highest European auction price was set by Alberto Giacometti’s Walker I ($104.3 million) in 2010.

Despite the sluggish New York and London auctions in the first half of the year, auction sales in these cities combined with Hong Kong accounted for 86% of the total global auction market, and the three cities remained the center of the art trading market. Zurich and Geneva, on the other hand, saw a 120.6% and 100.3% increase in auction sales, respectively. Amsterdam (39.8%) and Milan (1.9%) also increased.

The report also mentioned fractional investment that shakes the overall shrinking art market. Lichtenstein’s trading platform Artex was cited as an example of split ownership and tokenization of artworks. Artex has securitized Francis Bacon’s third series, and an investor can buy shares for at least $100, which can be traded on Liechtenstein’s Alternative Trading Platform (MTF). Mintus in the U.K. and Masterworks in the U.S. also operate STO (Security Token Offering) platforms that tokenize artworks and issue them as securities. In response to this trend, the report said, “It is an unknown area where we cannot expect what will happen,” adding, “Investors will have no choice but to doubt the actual confirmation of the work, the subject of the source investigation, insurance, work management, storage, and resale decisions.”

An auction scene of My Art Auction. Image courtesy of My Art Auction.
An auction scene of My Art Auction. Image courtesy of My Art Auction.

Meanwhile, the Korean art auction market was also in decline during the first half of 2023. The total amount of auction bids traded at the three major Korean auction companies, K Auction, Seoul Auction, and My Art Auction, fell 47.03% from the same period last year. The sales totals of these three companies in the first half of the year was about $47.35 million (KRW 61.371 billion). The number of works sold was 1,625, down 8.45% from last year, and the winning bid rate was 71.24%, down 10.96% from last year.

Among the three auction companies, Seoul Auction saw the largest decrease in the total amount of successful bids. This amount in the first half of the year was about $19.33 million (KRW 25.05 billion), down 64.14% from last year. K Auction recorded a total of about $19.07 million (KRW 24.71 billion), down 39.06% from the same period last year. On the other hand, My Art Auction recorded about $8.96 million (KRW 11.61 billion), an increase of 113.51%.

“The art market is undergoing readjustment, but the portfolio continues to change in it,” said Jeong Joon-mo, CEO of KAAAI. “The conditions for selling art are becoming more and more complicated, and small factors can lead to completely different results and prices.”

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Jonathan Feel
Jonathan Feel

Jonathan Feel is a reporter and editor for Auction Daily in Korea. He has been active in various fields such as the media, social economy, village community, and fair trade coffee industry and is writing. It is recognized that art is not far from society and the times, and that art can be a tool for the sustainability of the Earth and mankind. He hopes that good works and artists in Korea will meet with readers.

김이준수는 한국 주재 옥션데일리 필진이자 편집자이다. 언론, 사회적경제, 마을공동체, 공정무역 커피업계 등 다양한 분야에서 활동했고 글을 쓰고 있다. 예술이 사회·시대와 동떨어져 있지 않으며, 예술이 지구와 인류의 지속가능성을 위한 도구가 될 수 있음을 인식하고 있다. 한국의 좋은 작품과 아티스트를 많이 소개하고 싶다.

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