Art Market

Why Impressionist and Modern Works Are Losing Ground at the Top End of the Auction Market

Isaac Kaplan
Aug 8, 2016 8:50PM

After two years of astronomical, double-digit growth, the post-war and contemporary art auction market took a bit of a tumble in 2015, contracting 14%, in comparison to a 7% contraction of the art market as a whole. According to the 2016 TEFAF Art Market Report, post-war and contemporary works nonetheless accounted for roughly 46% of the entire auction market by value last year—the largest of any sector.

Looking at the very top of the market over time, however, artists in the Impressionist and modern category continue to dominate. Of the 100 most expensive artists at auction, 35% come from this segment of the market. Post-war and contemporary artists do represent a relatively close second, at 27%, followed by Chinese Painting and Calligraphy at 17%. Old Masters appear rarely among the most expensive artists sold at auction, with only 13 artists from the time period cracking the list.

There are myriad factors that affect the relationship between the major sectors of the market. Supply, both in terms of quality of the works available and their number, is an increasingly important factor at the moment, with collectors less likely than in the past to part with top-quality material. Questions about the viability of the overall macro-economic climate has brought down demand (i.e. the number collectors willing and able to pay top dollar and beyond). And it has meant that auction houses aren’t able to offer the business terms they recently could to secure top lots.

In other cases, the very fact that it now takes a $22 million auction sale to crack into the 100 most expensive artists, means that much of the material is simply not available at this point in time. As Don Thompson, economist and author of The $12 Million Stuffed Shark noted, “The best Impressionist and modern works have disappeared into museums and long-term collections.”

Occasionally a big ticket work—like Modigliani’s Nu Couché (1917–18), which sold in November 2015 for $170.4 million—will still hit the auction block, attracting headlines and breaking records. But there is much more to a period’s market than the cream of the crop. And the dwindling supply of top-quality Impressionist and modern works has knock on effects to other market segments. “There are no more Rose-Period Picasso’s of any importance. There aren’t any,” Thompson said. “So by definition, the contemporary market has become more important because the Impressionism and Modernism market has become less important.”

To compare massively broad categories like post-war and contemporary to Impressionist and modern art is also difficult when there is such variations in quality, price, and artist represented within each sector. “Among even the Impressionists it varies widely,” said art adviser Todd Levin. Bring an exceptional Monet to market and it’s going to sell, but “it’s not as though all Impressionist work across the board is selling off the blocks.” The same is true across the various sectors like contemporary, modern, and Old Masters, Levin said. Certain works of “top quality, that are well recognized and by an in-demand artist” in any sector of the market will do very well. “If it’s not that then it will probably have a real problem,” the art adviser added.

Though Chinese artists comprise 17% of the top 100 artists at auction according to our data, the realities of that country’s auction market means that it’s difficult to say what percentage of the lots fetching dazzling figures were actually paid for after the gavel’s fall. And the inflation of prices by Chinese artists may be hurting their market overall. “The Chinese have artificially pushed the prices of many of these artists so hard,” Levin said. “The stars are in the $5–10 million range. I don’t mean the older Chinese artists who have passed away; I mean recent Chinese artists.” It is worth noting that that all but two of the Chinese artists who made our list are deceased (the exceptions are Zeng Fanzhi and Cui Ruzhuo), but the broader trend of pushing up the value of Chinese art can hinder the market since “people, especially museums, are going to think very hard before they spend $5 million or more on a single piece.”

Recent years have seen an effort made to build up a network of patronage for Chinese work within China. But as Thompson noted, the market within China for Chinese art is dependent more on politics than economics. For one thing, if the state “says stop gift-giving, then art as a gift item becomes much less attractive.” By “gift giving” Thompson refers to so-called elegant bribery—the use of art and other luxury goods like Swiss watches for leverage among tycoons and the political elite. Both the art and watch sectors have seen precipitous drops in consumption since Chinese President Xi Jinping began a crackdown on the practice in 2014.

But to what extent can the market for Chinese art expand beyond the country or to Western auction houses within China? “There is still some stigma attached to a Chinese consignor consigning a work to a Western auction house rather than to a Chinese auction house,” Thompson explained. He added that no such stigma applies to a Chinese buyer purchasing from a foreign auction house. Zooming out, it is difficult to predict the often fickle feelings of the art market, so to what extent Chinese works will find buyers outside the continent is hard to say. Hefty price tags, as Levin noted, are likely to hamper interest. “Everyone was surprised by the quick acceptance of Chinese art after 2008,” Thompson said. “Chinese art does seem to resonate better with Western buyers than, say, Indian art. But in terms of what will be in fashion five years from now, I have no idea.” 

Isaac Kaplan