Dr. Clare McAndrew: Keeping an Eye on Art
“The art market couldn’t keep peddling along at the rates we saw in 2014, which was the best year since we began the Art Market Report,” says Dr. Clare McAndrew, cultural economist and author of the TEFAF Art Market Report. McAndrew is explaining the overall 7% year-on-year drop in global art sales in 2015, to $63.8 billion. The volume of sales last year dropped by 2%, to 38.1 million transactions. Most of the value was shared among post-war, contemporary and modern art.
“This is not a bubble bursting,” McAndrew notes. “Things are just cooling off.”
A Polarized Market
However, the market is highly polarized. “The highest-priced segments have been growing at a faster pace than the rest,” McAndrew says. Sales above $1 million increased by 400%, according to the Art Market Report. This segment accounted for 57% of the value of fine-art auction sales, though only 1% of transactions. And art sales at the above $10 million ultra-high-end rose 1,000% year-on-year — making this the only segment to increase in value over 2014.
Internet sales are dominated by lower-priced transactions, but the value of those sales is trending upward: In 2015, Internet sales increased 7% year-over-year, reaching nearly $5 billion (7% of the global market).
Focus on New York
In the United States, sales overall rose 4% to their highest level ever, and the focus is on New York. “New York gets the best prices,” McAndrew opines. “There is a critical mass of good stuff in New York, and people come to the U.S. to buy art.”
TEFAF is entering that world with two important art fairs per year at New York’s Park Avenue Armory, starting this autumn and continuing in spring 2017. “TEFAF has been very European thus far,” says McAndrew, “and we realize there are very important buyers in New York who may not like to travel.”
Art fairs and auctions are hubs of “cultural tourism,” which McAndrew credits with boosting the economy Art sales are just a portion of that benefit. “Art fairs directly and indirectly employ thousands of qualified people – there are insurers, event support staffers, shippers and packers, booth designers,” McAndrew points out, adding, “and then there’s the impact on tourism in general.” Indeed, tourism statistics show that cultural tourists tend to stay at more expensive hotels and spend more in general than the average visitor on such things as restaurants, shopping, entertainment and other activities unrelated to the art market.
Looking ahead, McAndrew will be focusing on auction sales to see if the likes of Sotheby’s and Christie’s can keep their margins while offering high-value sellers attractive financial packages amid fierce competition. And she’ll be watching what comes to the market. “Supply drives the art market,” she reminds us. “There is always someone ready to buy high-quality things.”
Dr. McAndrew is a cultural economist who specializes in the arts, antiques, and collectibles markets. She set up Arts Economics in 2005 to focus her efforts on art market research and analysis, and works with an international network of private consultants and academic researchers in providing research and consulting services to the global art trade and financial sector. She publishes the annual TEFAF Art Market Report.