Increasing optimism about art's value as an asset class

It seems like the Blue Period of contemporary art market is over. Nearly a year and a half after prices plunged, the auction houses state they have managed to recapture their pre-recession momentum. For example, Christie's International PLC revealed it sold fine and decorative art worth $2.57 billion in the first half. This is almost 43% up from a year earlier and incidentally the second-highest in its history.

The auction house's total comprises close to $275 million in art it sold privately, up by over a third from a year ago. Overall prices were up for most major art categories, including $368.2 million of Asian art, up by an impressive 120.6%%. On the other hand, Sotheby's auctioned over $2 billion of art in this year’s first half, more than almost double a year ago. ‘Nude, Green Leaves and Bust’ fetched $106.5 million, the highest price for a work at auction. It squeaked past rival Sotheby's top seller, Alberto Giacometti's ‘Walking Man I’ that went for $104.3 million.

Both auction houses capitalized on growing interest of collectors in modern sculpture. At Christie's, overall prices were up for nearly all of the auction house's major art categories., including $853 million of Impressionist and modern art, up 37.4%; $460.7 million of postwar and contemporary art, up 139%; and $368.2 million of Asian art, up 120.6%%.

As is evident, collectors who retraced during the worst ever economic crisis are feeling increasingly optimistic about the values of art in comparison with other assets. The visible boost in their confidence made it possible for chief auction houses to prompt sellers to auction off their trophies. Christie's chief executive, Ed Dolman, was quoted as saying in The Wall Street Journal News report: “We are not going to lull ourselves into any false sense of security. However, the art market seems to be surely recovering far quickly than anyone expected."

In fact, buyers still remain divided over how fast the market should catch up. Seasoned collectors in Europe and the US still seeking potential bargains, represent a bit of skepticism prevailing out there. But they are facing greater competition from new enthusiastic Asian bidders more willing to splurge. Summing up the situation, Kelly Crow of The WSJ notes in a news report:

“So far this year, the clash in attitudes—one cautious, the other giddy—has created an unpredictable marketplace in which artworks tend to fly or flop without warning. Jewelry is another strong seller, thanks in part to a surge of interest from Asia.”

Other spots in the world are looking up, too. Art sales in Hong Kong and Dubai have climbed up.