How to Buy a Work of Art
The main ways to purchase works of art are from galleries, at art fairs, at auction and also via the internet.
Selecting and buying a work of art is both a personal and a professional transaction. It requires passion, time, effort and, above all, knowledge. A personal decision is made to buy an object of aesthetic beauty. A professional decision is made as to the choice of the artist, the subject matter, the size and the art medium. Research must be undertaken to establish and confirm the targeted work’s authenticity, provenance, market freshness, historical importance and therefore its current market value.
Major collectors generally work with a qualified independent art advisor who uses market, technical and transactional expertise and an unbiaised position to select the most suitable work corresponding to the needs of the collector/investor.
Here are a few figures and facts about the world art market in 2011, courtesy of the global leader in art data, the French company www.artprice.fr.
Key art market figures and facts for 2011
$11.5B: total global art auction revenue
The absolute record… the total exceeded $10 billion for the first time ever, and grew 21% versus 2010. This strong growth was sustained throughout the year. After a record first semester ($6.5 billion), the second half of the year was just as exceptional ($5.1B, the best second semester ever recorded).
43%: Asia’s share of the global art market
The growth of the art market in Asia has been stunning. In the spotlight since China effectively became the world’s leading art marketplace in 2010, the year 2011 confirmed not so much the migration of the art market (which is still dynamic in the West) as a new situation of global art market bi-polarity. Aside from China’s astonishing 38% growth in art auction revenue in 2011, a number of other Asian countries also posted strong growth: for example, Singapore (+22%) and Indonesia (+39%).
$271,795,000: the total revenue of the year’s best auction sale: Sotheby’s, Contemporary and Post-War Art sale, New York, 9 November 2011
This is the best sale result since 2008, but had it taken place in 2007 it would only have been the third best result. The sale benefited from two new records for Clyfford E. Still, and a new record for the German artist Gerhard Richter. Only 17% of the lots remained unsold, and 41 fetched more than $1 million.
$57.2m: the best result of the year
This figure was not generated by Pablo Picasso, or Alberto Giacometti, or even Andy Warhol, but Qi Baishi who scored the year’s best result with Eagle Standing on Pine Tree; Four-Character Couplet in Seal Script when it fetched $57.2 million in Beijing on 22 May. Although 2011 did not see a new global record (in 2010 the global record was broken twice), it did see a large number of very high-end results.
1,688: the total number of results above the $1 million threshold
No new global record for a single work last year, but a 33% increase in the number of results above the $1 million line. And it comes as no surprise that China posted by far the best national score with 774 results. Indeed, Hong Kong alone posted twice as many million-plus results as for the entire Euro area!
58.5%: the share of the art auction market’s total revenue generated by the top “1%” of lots
In other words the most expensive “1%” of all lots sold generated 58.5% of the world’s total auction revenue in 2011. Hence, the remaining 99% of auction results generated less than half of the entire market’s revenue. Again, it is not surprising that China accounts for the largest share of this “1%” (50%) with the USA representing 23% and the UK 20%.
69%: the percentage of lots that sold for less than $5,000
Over the last ten years, only two posted an “affordable works rate” below 70%: 2007 and 2008. It was therefore logical that in 2011 (which posted a number of similarities to those 2 years of strong art market growth) only 69% of the total lots sold changed hands for less than $5,000. In 2009 and 2010 the “affordable works rate” reached 74%. In 2011, the number of affordable lots did not diminish in absolute terms… it actually increased by 4.5%; but this expansion was slower than the rise in the number of high-end works offered. Asia, which accounted for 43% of the global art market, sold 19% of its auction lots for more than $100,000.
4th: France’s ranking on the global market with a market share of just 4.5%
France, third in 2006, has been in fourth place since 2007 since it was overtaken by China. In 2011, it maintained its fourth place although its market share was again eroded. Not much was done in 2011 to reverse this trend. Paris is now not only behind London and New York, but also Beijing and Hong Kong, and Shanghai (which posted growth of 21% in 2011) has reduced its lag by half and is now just $50 million behind the French capital.
12,400: the number of new artists’ personal auction records
Excluding auction debuts, in 2011 more than 12,400 artists reached new auction summits including Qi Baishi ($57.2 million in 2011 vs. $12.5 million before 2011), Clyfford Still ($55 million vs. $19 million), Roy Lichtenstein ($38.5 million vs. $38 million), Egon Schiele ($35 million vs. $20 million), Salvador Dali ($19 million vs. $5 million) and Gerhard Richter ($18.5 million vs. $13 million)
This above data reflects two fundamental changes in the art market during the last ten years; firstly the geographical shift of the world art centre from Europe to Asia. The second is that, in addition to the traditional collector and the buyer of a single piece of art, there are now art investors and art investment funds underscoring the emergence of art as a major financial instrument.
(For those who enjoy anecdotes, it is commonly understood that the first recorded art investment fund was French. ‘The Bearskin Fund’ was founded in 1905 by Andre Level and catered to art lovers who were unable to individually finance important artworks. The fund investors chose over a hundred paintings and drawings, including works by Picasso and Matisse. In 1914 the fund was liquidated at auction in Paris for a 400 percent return on investment.)