News-Antique.com - Apr 15,2011 - Is the Chinese Art Market Boom Doomed? – artmarketblog.com
As well all know, and as I have written about many times before, the art market experienced a serious collapse in the early 1990′s when the Japanese wealth wagon that was driving the art market boom came to a grinding halt. News last week from artprice.com that China overtook the USA during 2010 claiming the title of world’s biggest auction market for fine art should have evoked a sense of deja vu in many people. It certainly did for me. What concerned me even more was a comment made by Grant Ford, Sotheby’s Head of Irish Pictures, who said regarding a recent sale:
“Today’s sale achieved the highest total by far for any Irish art auction worldwide in two years. We saw a fabulous price for the O’Conor and a resurgence of interest in Yeats. Of note is the fact that we witnessed an influx of new buyers and bidders from Ireland, the UK and the US, as well as China. Testament to the appeal of this market is the reappearance of certain buyers from Sotheby’s Irish sales during the 1990s. A busy saleroom saw competition between room and telephone bidders, with the top lot keenly sought after.”
The concerning part of this comment is the suggestion that buyers who were active during the 90′s are returning to the market. The question on most people’s minds would be: why now? Well, the answer is that prices have risen enough to instill confidence back into the minds of buyers. Although it might seem more logical to be more active when prices are low, most people lose confidence in the art market when prices are low and regain that confidence when prices begin to rise again – as they have been. Even though the above comment is in relation to a relatively small market, any inference that buyers from the 1990′s are returning to the market should be of concern.
Yet another sign that the art market is heading towards a 90′s style bubble is the resurgence of interest in the work of artists such as Hirst, Koons, Murakami, Prince and others who are known as boom time favourites. As soon as good taste and intelligent buying become less important than social status and reputation, you can bet your bottom dollar that the names mentioned above will start to appear in the headlines more regularly.
What frightens me more than anything I have mentioned so far is the rate at which the Chinese art market has grown. From fourth place in global auction sales to first place in a matter of four years is nothing short of amazing. As a result of this rapid rise many people are asking the question: is the Chinese art market boom sustainable? If the current evidence I have of the cracks that are already beginning to appear in what seems to be the stellar economic growth that China is experiencing, the answer is a big NO.