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Perspectives

The art market’s changing scenery

Suzanne Gyorgy

By Suzanne Gyorgy

Global Head, Art Advisory & Finance

September 6, 2016

When trying to make sense of today’s art market, it’s important to remember that history tends to repeat itself and that in life, change is a given.

Today, the art market is going through a series of fluctuations and adjustments. The traditional model of buying and selling art through public auction is being stressed and challenged by technology, shifting buying habits and the trend towards experiential rewards in addition to art acquisition.

After May’s auction sales in New York and June’s sales in London, many news articles covering the art market were filled with gloom and doom, citing the mathematical fact that art auction sale volumes were down 29% to date compared with 2015.[1] But comparing auction sales year over year is not in itself an accurate indication of the overall health of the art market.

The auction market is directly impacted by the supply of works that have to sell, which is most often driven by the ‘three Ds’ – death, divorce and debt – and the corresponding price-points for these works of art. One significant factor for the decrease in auction sale results was that there have not been any large estates with art to sell. Another factor is the explosion of art fairs around the world, and the experiential events and programs they offer to collectors.

Citi Art Advisory is seeing a shift away from live auction as the first choice of venue to buy art. Many collectors today are going back to purchasing art from galleries, especially during art fairs, as well as from the expanding private sale departments of the major auction houses. We believe this shift is driven by the collector’s desire for greater control and transparency in the buying/selling process, and the relationships and experiences that develop during that process.

Happily, as the market for buying art expands with on-line sales sites, an increased array of art fairs and the evolution of the auction houses, art collectors are offered greater access to art at all price-points, giving more people the chance to embark on their own creative, journey of viewing, experiencing and collecting art.

 

[1]   The New York Times, 8/5/2016

 

The Citi Private Bank Art Advisory & Finance is a comprehensive fine art consulting service that provides collection administration, estate consultation, philanthropic planning, and art financing. All credit products are subject to credit approval. Alternative assets such as art are speculative, may not be suitable for all clients, and are intended for those who are willing to bear high economic risks. The Citi Private Bank Art Advisory & Finance does not advise clients how to profit from the purchase of art or guarantee that a particular piece can be sold or otherwise used for a financial transaction for any amount including an amount equal to the purchase price.

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