Is the current market favourable for art buyers?

This weekend, the Investec Cape Town Art Fair will showcase the creative work of more than 500 artists from different parts of the globe. This translates into 1000 unique art pieces for visitors to choose from. That is a lot of art. How do you navigate this morass of visual expression, and more importantly which artist, and contemporary art should you consider for your collection? 

The art market has not been immune to instability and weakening of financial markets. In fact, the global art market experienced a considerable dip in 2023. Or at least this was the conclusion that several art reports - UBS Art Basel, UBS Global Collectors Survey, Deloitte Art & Finance Report 2023, Artnet's Intelligence Artnet Intelligence Report 2023 - arrived at.   This was largely based on an analysis of auction results pertaining to the three dominant auction houses namely, Sotheby's, Christies and Phillips, which had all experienced a substantial decline (around 16%) in revenue in the first quarter of 2023. Some art market commentators, have suggested that this decline has made for a "buyers market". 

How exactly have they arrived at this idea, and is it just a way of putting a positive spin on an economic downturn? Where does the African art market figure into this outlook, given South Africa's leading auction house enjoyed an increase in revenue during this time in 2023? 

As I reported for Investec (read here), when researchers drilled into the auction figures of the leading global auction houses they found that this decline in revenue was largely due to the absence of high-valued works being offered for sale - those over the $10-million bracket. 

Activities, patterns and results at this high end of the global art market - don't necessarily reflect the realities on the ground with regard to the African art market - where it is such a rarity for works from the continent or by artists from it that would attract a $10million price tag. Works by the likes of El Anatsui, Marlene Dumas would fall into this category. Last year Julie Mehretu's abstract painting Walkers With the Dawn and Morning which fetched $10.7m at Sotheby's in New York last year. The sale was so significant it made headlines. 

Such high-valued African works tend to come up on international sales. Indeed the sale of contemporary African art struggles to fetch huge sums at auction. For this reason, most auctions dedicated to African art whether in South Africa or London, typically include high-valued modern works, which are relied on to support a healthier-looking sale. 

If you dip into Strauss & Co's 2023 records - you can find an editioned bronze sculpture (Cat, 1999) by William Kentridge that fetched around R4-million. However, superficially, it doesn't appear as if South Africans have developed an appetite yet to spend over R1-million on contemporary works given that artworks by Billie Zangewa and Nicholas Hlobo offered by Strauss did not find buyers in 2023. Even a coveted tapestry work by Athi-Patra Ruga, Inganya Indoda Kum? (Would more of a Man be Better?) valued between R300 000 - 500 000 - went unsold. However, you do have to weigh this up against the fact that God is a Gangstah, by Ayanda Mabula found a buyer willing to part with R 346 575 for it. Is there more of an appetite for art in the R300 000 category? Works by Kudzanai Chuirai and Zander Blom around the R300 to R500 were passed on in 2023. But they were not great examples of those artists' works. 

In light of this, sellers of high-valued contemporary - or modern works - might opt not to bring them to auction. To wait until the economy swings in a more positive direction again. 

It comes down to confidence in the market, suggests Frank Kilbourne, executive chairman at Strauss & Co. 

“High-value items will come to the market when sellers are confident that market conditions are supportive of high sales volumes and prices,” he says. 

The London-based Sotheby's Modern and African Contemporary department certainly appears to have suffered the most due to this turn, as they were notoriously an ideal platform to reach global collectors of African modern and contemporary works and thus tended to attract high-valued works. 

In 2022 their October London sale (typically their biggest) netted over £2-million, while in 2023 that revenue almost halved to just over £1-million.  

The absence of high-valued works being offered by auction houses has led some commentators, such as Katya Kazakina to advance the idea that the art market in its current state favours buyers over sellers. 

"The irrational exuberance that had gripped the market since COVID-19 struck is officially over," declared Kazakina. 

However, if a lack of confidence in the sale of art at auction, secondary sales, is low, then perhaps, if it is indeed a 'buyers' market" the primary market - at galleries or art fairs - is where collectors should concentrate their efforts. This is usually the first port of call for collectors when buying contemporary works - though it must be said that auctions are a good place to find works that haven't yet reached their value potential. 

This shift that is taking place in the auction market does mean, however, that buyers will have to;

1) Hang onto their new acquisitions for longer than they may have intended.

2) As a result of the above, snapping up works by fashionable names, which might be less important in a year or two from now, would be unwise.

3) Consider each acquisition carefully, ensuring it is a good example of the artist's work, a particular mode of expression or exemplifies an important thematic strand in contemporary practice.

Mary Corrigall will be offering 'instant' (1 hour turn-around time) assessments of contemporary works at the Investec Cape Town Art Fair. You can contact her via Whatsapp Here