Art Market Appears on Strong, if Cautious, Footing After London Sales

Major auctions in London this week are proving the art market is in solid health at the start of 2023, yet high interest rates and inflation in addition to the war in Ukraine continue to keep enthusiasm in check.

Overall, more than 90% of the lots were sold at combined evening sales of modern, contemporary, and ultra-contemporary work at Christie’s and Sotheby’s, while Phillips evening sale was 100% sold. Those are unquestionably good results.

But there are signs throughout the market that consignors and collectors are holding back a bit, says Drew Watson, head of art services at Bank of America Private Bank.

“The sales were fairly solid, but there was kind of a lack of major headliners,” Watson says. “We’re seeing some increased conservatism among the collector base. There’s more of an emphasis on people looking at established categories like modern masters, blue-chip post-war, [and] Surrealism.”

A dedicated evening sale at Christie’s focused on Surrealism did well, for instance, realizing nearly £39 million (nearly US$47 million) with 30 of 32 lots sold. Sotheby’s will hold a dedicated Surrealist sale on March 15 in Paris.

But works by young contemporary, often female, artists continued to attract interest all week. At Phillips, “it was the cutting-edge woman artists who stole the show this evening,” Olivia Thornton, head of 20th-century and contemporary art, Europe, said at a news conference following an evening sale on Thursday.

Most notable among these artists at Phillips was Caroline Walker, whose large-scale work Threshold, painted in 2014, generated consistent back-and-forth volleying for more than 11 minutes. It eventually sold to a bidder in the sale room for a hammer price of £730,000, £927,100 with fees—a record for the artist.

Other records were achieved by Sarah Ball, whose Elliot, sold for £120,600, with fees, above an £80,000 high estimate, and by Angela Heisch, whose Egg White Blue sold for £76,200, above a £30,000 high estimate.

The results followed strong bidding for female artists at Christie’s earlier in the week, which included the previously minted record for Walker of £693,000 for The Puppeteer. Cristina Banban’s La Fatiga Que Me das (You Exhaust me) also achieved a record, selling for £163,800, above a high estimate of £70,000, and Michaela Yearwood-Dan’s Love me nots achieved £730,800, far above a £60,000 high estimate.

But also at Phillips, a dynamic canvas by Gerhard Richter offered by French collector Marcel Brient for between £10 million and £15 million, was withdrawn at the last minute. Although the work “generated interest from collectors,” it was not at a level that met Brient’s expectations, and so he “was not prepared to let it go,” Cheyenne Westphal, Phillips chairman, said at a press briefing after the sale.

The absence of the Richter resulted in a dramatically different overall auction total of £20.3 million for Phillips. The revised estimate for the 23 remaining works was between £15.8 million and £22.2 million.

Another work offered by Brient, an untitled late work by Willem de Kooning from 1984, sold for a hammer price of £5 million, £6 million with fees, below the presale low estimate of £7 million.

While the froth may be out of the market at the moment, there is some cautious optimism of the future, with a handful of single-owner collections anticipated for May. Already announced at Sotheby’s is a group of works to be offered by Jan Shrem and Maria Manetti Shrem of San Francisco, including a major work by Pablo Piccaso, in addition to the Erving and Joyce Wolf Family Collection of decorative and fine arts. Christie’s, meanwhile, will be selling 16 modern and post-war paintings from the collection of S.I. Newhouse that could realise more than US$144 million.

“We’re only going to see more as we get closer to those sales,” Watson says. It’s a sign, he adds, of “cautious optimism for the higher end of the market in New York.”

Buyers, however, remain more conservative, as was evident with some of the major works offered this week, such as Lucian Freud’s portrait, Ib Reading, 1997, which sold for £17 million, within expectations, at Sotheby’s. They are willing to buy, but at the right price.

“Buyers are pretty savvy, especially at the high end, and will kind of expect a bit of a discount” considering current macroeconomic and geopolitical conditions, Watson says. As a result, auction houses will need to be disciplined in how they price works. “It’s not really a market where you want to push estimates,” he says.

One notable shift this week was renewed active bidding from buyers in Asia, Watson says.

At Christie’s, a bidding war between collectors in Japan and Singapore for a painting by Shara Hughes, Rough Terrain, ended in the hands of the collector from Singapore who placed a bid of £500,000, well above the £300,000 high estimate. Overall, 13% of bidders were from Asia during Christie’s evening sale of 20th- and 21st-century art and a separate sale of Surrealist works.

Sotheby’s, meanwhile, credited “deep bidding” from Asia for driving results at its evening sales, with several of these collectors noted as the “underbidder.” Over half the lots in Sotheby’s The Now sale of ultra-contemporary works received bids from Asia, while Asian buyers secured Barbara Kruger’s Untitled (Out of your mind… In your face), 1989, which realised £889,000, above a high estimate, and Andy Warhol’s portrait of Debbie Harry, which realized £6.9 million, also above a high estimate, after spirited bidding in both instances.

An Asian buyer also bought Richter’s Abstraktes Bild, 1986, at Sotheby’s, in another active bidding round. The final price, with fees, was £24.2 million.

At Phillips, the last two lots attracted several online bids from China, although the paintings—Ball’s Elliot, and Danica Lundy’s Bonefire—went to a collector bidding via a specialist on the phone and to a Canadian online bidder, respectively.

Whether the results in London portend the future for the art market this year remains to be seen. It may be best at this point to consider a post-sale press conference comment from Phillips CEO Stephen Brooks, who said, “It’s difficult to draw conclusions from one week of sales.”