Experience Stern | News & Events

The Spectator
(c) The Spectator (1828) Limited 2011

Homes may continue to lose value, the euro becomes shakier by the day, the unemployed stay unemployed and even the Chinese economy shows signs of overheating, but the international art market seems to know only one direction: up. For the first half of 2011, Christie's sold

3.2 billion in fine and decorative art (an improvement of 25 per cent on 2010), while its rival Sotheby's auctioned items worth

3.4 billion (up 38 per cent on the previous year).

The bubble appears to be far from bursting, and the autumn sales promise to provide plenty of entertainment for those who like to see big prices on both sides of the Atlantic.

Leading the pack is Gustav Klimt's 1915 oil landscape 'Litzlberg am Attersee', estimated by Sotheby's New York for its 2 November Impressionist and Modern Art auction at 'in excess of

25 million', which many observers believe is a lowball figure. Other Klimt auction sales in recent years include the 1916 'Kirche in Cassone' (

43 million, estimated

20-30 million), the 1903 'Birch Forest' (

36 million, estimated

20-30 million) and the 1916 'Houses at Unterach on the Attersee' (

28 million, estimated

15-25 million).

'Litzlberg am Attersee' was consigned to Sotheby's within months of being awarded to 81-year-old Montreal resident Georges Jorisch, whose Viennese grandmother had owned the painting until 1941 when she was deported to a German concentration camp where it is assumed she died. The painting bounced from one owner to the next, finally landing at the Museum der Moderne in Salzburg, Austria, where Jorisch made a legal claim for it, a process that took years.

In the interest, perhaps, of providing an incentive for the museum to comply with Austria's 1998 Holocaust art restitution law, Jorisch promised to donate a percentage of the profits from the sale to the museum for the construction of a new wing named after his grandmother.

Another notable lot in the Sotheby's sale is Magritte's 1926 oil 'Le Chevalier du Couchant' (estimate

4-6 million), an enigmatic work in which a flat, wooden figure wearing a Roman toga stands next to a draped figure without a head, behind which is a painting of a flag. Whatever the painting signified to the artist, it was inspired by the work of another artist of mysterious imagery, the Italian proto-Surrealist Giorgio de Chirico. Sales of Magritte at auction had done well before the recession and after; perhaps, like Picasso and Warhol, he may be a recession-proof artist. The top public sale price for one of the artist's paintings is

12.66 million for the 1952 'L'Empire des Lumieres' at Christie's in 2002, but Christie's London sold his 1963 'Souvenir de Voyage' this past June for just over

8 million, while the 1941 oil 'L'aimant' sold for

7.6 million at Christie's London in February.

Expectations are high for strong autumn auctions, but behind some of the big numbers for individual sales there are worries.

Christie's first half of the year sales in the Americas were actually down by 13 per cent on 2010, to

941.6 million, although Sotheby's sales in this area rose 12.8 per cent to

956.6 million. For both auction houses, sales in Asia rose significantly, by 48 per cent to

482.5 million for Christie's and 102.7 per cent to

548.3 million at Sotheby's.

Perhaps, then, art is immune to the turmoil and disruption that affect other markets because of the growing wealth in China, India and elsewhere in the emerging world.

According to Neal Meltzer, former head of postwar and contemporary art at Christie's and now an art gallery owner and adviser in Manhattan, 'There is increased demand, because we live now in a global economy, but no increased supply.' That situation leads to higher prices, and 'the big prices bring out great material to sell' - which again leads to even higher prices.

Artwork appears to take political unrest and the vicissitudes in prices for basic commodities in its stride - a hedge against inflation when there is inflation and a safe haven for investors when inflation is negligible or trouble is brewing somewhere around the world. William Ruprecht, president and chief executive officer of Sotheby's, stated that the auction house has been 'encouraged by the continuing strengths of what we've seen in the global art market and the buying activity of clients from newer marketplaces. Some of the market volatility they've seen around the world [ . . . ] in other arenas, we think, has encouraged participation rather than diminished it in our own marketplace.'

Others agree, citing other factors. 'Artwork is an uncorrelated asset, ' said Michael Moses, a former professor at New York University's Stern School of Business and co-founder of Beautiful Asset Advisors, which charts the strength of sales of art at auction to the Standard & Poor's 500 Index.

'It doesn't relate to anything that happens in other assets, like oil or gold or the price of wheat or corn. That improves its allure.' The only realm to which there is a correlation, he noted, is 'global accumulated wealth', which has been 'on the rise'.

Ruprecht noted that the auction house has done a better job 'in managing [the] issue of bidder default' among collectors in the developing world, some of whom had the tendency to bid aggressively for lots they had no intention of paying for. 'That is not to say that it's always easy to collect funds. In some situations . . . we have asked for deposits or assurances from [collectors] in a variety of methods that have been helpful.'

However, there is not much room for complacency. Where the market is for any particular category is touch-and-go. Firsthalf sales at Christie's and Sotheby's of 2011 Impressionist and modern art were down on 2010, while postwar and contemporary art were up at both auction houses. Twentieth century decorative arts had the largest gains, up 312 per cent to

78 million at Christie's (Sotheby's didn't release its decorative arts sales totals). Both auctioneers also reported large increases in private art sales, in which the auction house acts more like regular art dealers, a method by which collectors may sell items without it being publicly known what was sold and for how much.

The upcoming sales will feature some artworks recently deaccessioned from museums. Boston's Museum of Fine Arts, for example, is selling at Sotheby's in November eight Impressionist and PostImpressionist paintings, with an expected cumulative price of

16.6-24.3 million. The museum was willing to let these works go because it needs the money to pay for Gustave Caillebotte's 1884 painting 'Man at His Bath', which it described as one of the artist's greatest works. For those who argue against museums selling works from their collections even to raise money to buy other things, this added plenty of fuel for the fire.