The last time art prices were this high, in 1990, Japan was an economic juggernaut and Japanese property prices, which underpinned the huge Japanese buying of Impressionist works, were rising as if there were no tomorrow.
This time, however, it is US collectors – including a generous sprinkling of hedge fund managers and property developers – and the newfound popularity of contemporary art which are pushing up US art prices. The prices have risen by 40 per cent this year, passing the high of 1990 along the way.
As thousands of dealers, collectors and general hangers-on converge on the Art Basel Miami Beach fair this weekend, talk of an art bubble is becoming commonplace. In the short-term, however, the fair is only likely to push prices even higher. Now in its fourth year, the event – a spin-off from the giant annual Art Basel fair in Switzerland – is the biggest yet, with about 200 dealers exhibiting and at least seven satellite fairs in Miami to accommodate the dealers and galleries which did not get into the main event.
Artprice.com, which tracks the prices of artworks sold at auction around the world, said its index reached 133 in the US at the end of November, compared with 100 in 1990 when the index was started. It passed 100 last June.
The UK index, which also started at 100 in 1990, stood at 120 last month. The price surge has been fuelled by contemporary art, where young British artists are strongly represented, and this has revitalised the UK market. However, the big contemporary art prices are paid mostly in the US, by US buyers.
The year’s second main round of modern and contemporary art auctions, held in New York in November, helped push US prices sharply higher. A sculpture by the US artist David Smith, “Cubi XXVIII”, was sold to the Los Angeles-based multi-billionaire collector Eli Broad for $23.8m, a record for a contemporary artwork sold at auction.
Many observers have warned of a bubble in the contemporary art market, pointing to the collapse in art prices after the 1990 boom. Many of the Impressionists bought by the Japanese were quickly offloaded at a loss.
Works returning to market this year included a version of Claude Monet’s “Nymphéas” (1907) which was bought for $10.5m in 1989 and found a buyer at $12.5m in New York in November. Other works included another Monet, “Le Grand Canal”, a Maurice Utrillo lithograph, “Pour le bal de l’A.A.A.”, which sold for $9,000 in May 1990 and then for $22,500 last April and “Ancient Scientist”, a Jean-Michel Basquiat acrylic, which failed to sell in 1990 after a low estimate of $250,000, and went for $575,000 this year.
