It is timely to bring you up to date with current trends in the international art market and China’s growing role in its development.
Late last month, Deloittes and ArtTactic released a joint report into state of the art finance industry over the past 14 months. One of the major findings of the report is the continued importance of the Chinese collector.
The report states that over the year 2012, the global art investment fund market increased by 69% to US$1.62 billion, in part driven by the Chinese demand for art investments.
Entitled Art & Finance Report 2013, the report highlights how the nature of the art investment market has changed. Art has moved from being a source of client entertainment to being treated as an asset class in its own right, requiring pecialist art advisory and financial services such as art valuation, storage and insurance.
Wealth managers have increasing confidence in the art investment market, the report concluded after surveying private banks, art professionals and noted collectors, though economic uncertainty has given rise to the diversification of portfolios being of primary importance rather than immediate investment return. That said, emotional return remains the key driver for art investors and collectors however, and this needs to be factored into any wealth management approach to art investment.
The report commented on the slight decline of the Chinese art market over the period surveyed but predicted an increase in 2013. Auction sales of Chinese art in Hong Kong and mainland China fell by 43.6% between November 2011 and November 2012, putting China’s leading position in the art market under pressure.
In 2011, the Chinese art market increased its global presence, overtaking the U.S. market as the world’s largest in terms of the art trade as a whole, with sales of €9.7 billion or a 42% share. In autumn 2012, the report says, total auction sales of Chinese art (all categories) declined by 43.6%, from US$2.2 billion in autumn 2011 to US$1.24 billion, based on the results from the four biggest auction houses (Sotheby’s Hong Kong, Christie’s Hong Kong, China Guardian and Poly Auction). This was 52% lower than the peak of the Chinese art market in May 2011.
Market experts feel, according to the report that the intervention by the Chinese government in 2012, following allegations of tax avoidance with regard to art imports into mainland China, has made the market nervous and kept buyers away from the auction rooms.
This prediction of a market recovery has proved correct with respect to Chinese contemporary art as least according to the latest data. ArtTactic last week released figures which revealed that the confidence indicator for this area has risen 16.9 percent this month (to 57% from 49%). It summises the increase may be due to a rise in competition and scarcity of work due to the entry of new auction houses, as well as the strong presence of Chinese collectors.
For a full report please consult Art & Finance Report 2013