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Eastern & European fall auctions: the art market slowdown continues, without deepening

Updated: Nov 23, 2023

The recent auction sales of September and October 2023 just went by in Hong-Kong, London, and Paris. As expected, they all indicate the same dynamic that we’ve been witnessing for over a year now: triggered by the current crisis of supply and demand (which we analyzed in our previous article), the market is still going through important price corrections on modern and contemporary art. Overall, across the three major auction houses Christie’s, Sotheby’s and Phillips, the sales mostly displayed a dip in generated revenue compared to last year. But upon closer look, the results also displayed a few encouraging—but, truth be told, very timid—signs of improvement. Indeed, the evolution in sale revenues ranged from a very worrying 65% drop at a major Sotheby’s London Evening Sale, to a positive 3.4 folds increase at a Christie’s Hong Kong 20th/21st Century sale.

The most worrying auction results were bar none those of Hong Kong. However, one sale stood out positively among these: the aforementioned 20th/21st Century Evening sale by Christie’s, which was the first of them to take place, on September 24. This sale alone managed to do better in terms of revenue than its equivalent sale last year (albeit with more lots), multiplying its results more than three folds (3.4) with only 34.7% more lots than last year. Generating $ 11.2 million in sales revenue, the auction’s hammer total was $ 8.9 million before fees—a number which still exceeded the total sum of low estimates before withdrawals ($ 7.7 million). If not in Hong Kong, another sale which performed relatively well in the region (if one considers the current state of the art market), was Christie’s 10th Shanghai Auction Anniversary: 20th/21st Century Art Evening Sale, which took place one day prior, on September 23. With $ 17 million in revenue, this sale too managed to exceed the total sum of its low estimates before withdrawals ($ 10 million); on top of that, it had a sell-through rate of 93%. Apart from these relatively small sales (in terms of sales revenue), the bulk of the secondary market for fine art in the region showcased bleak results. Sotheby’s Hong Kong Modern Evening and Contemporary Evening auctions were particularly depressing to watch unfold on October 5, and not far behind was the long awaited (no pun intended) sale of the collection of Shanghai’s Long Museum, which took place the same day. These three sales all had their generated revenues (including fees) beneath the total sum of their lots’ low estimates (excluding fees) … The Contemporary and Modern Evening sales respectively showcased drops of 43% (from $ 68 million to $ 45 million) and 56% (from $ 58 million to $ 25,8 million) in sales revenues compared to last year’s equivalent sales, and 31% and 33% of their lots were either withdrawn or bought in.

Sotheby's "A Long Journey: A Selection from the Liu Yiqian and Wang Wei Collection" on October 5

In addition, both these sales generated a revenue (including fees) which did not even manage to reach the total sum of their low estimates (excluding fees). As for the sale of the Liu Yiqian and Wang Wei collection from the Long Museum, it was awaited with scrutinous eyes.

Amedeo Modigliani, Paulette Jourdain (1919)

Gathered by the two major Chinese collectors in the 2010’s from a selection of what was most valued on the modern and contemporary art market even until recently, it was already a worrying sign to the market for these lots to be suddenly put up for sale like something to get rid of. Sadly, it seems as though the sale itself delivered on that promise… Estimated by Sotheby’s—after a few lots were preemptively withdrawn—to be worth at least $ 95.4 million (excluding fees), the sale only managed to gather $ 58 million (hammer total before premiums) for these lots, and only had a 73% sell-through rate (quite a low number for an Evening sale of that stature). So, a dramatic overall price correction of 39.7% on what could mostly be considered as major works of modern and contemporary art... Finally, the main evening sale by Phillips which took place the next day displayed slightly better results, but truly nothing extraordinary: a 28% drop in sales revenue compared to last year (from $ 33.6 million in 2022 to $ 24.2 million this time around), and a 58% drop compared to 2021 ($ 58 million).

Little time after in London, the results of the fall auction sales were more nuanced, and thus more encouraging. The main evening sale by Christie’s (20th/21st Century Art Evening Sale) on October 13 managed to salvage what it could with an honorable sales revenue ($ 54.5 million) considering the current context—that is, between the sums of its low and high estimates ($ 49.2 million to $ 70.6 million). However, once more by a small margin, given that pre-sale estimates exclude the fees included in the final sale’s revenue. On top of that, the auction managed to sell 85% of its lots—one of the very best sell-through rates of this auction season. But let us not forget the main takeaway here: this sale represented a 38% drop in revenue compared to the equivalent sale of 2022, which had raked up GBP 72.53 million.

Gerhard Richter’s Abtraktes Bild (1986), estimated £ 16 – 24 million, ended up being bought-in at the Contemporary Evening Auction of Sotheby's London

Similarly, one day prior, Sotheby’s main evening sales showed contrasted results. On one hand, the Contemporary Evening Auction of October 12 was representative of today’s market: fewer quality lots up for grabs, as testified by a smaller sum of low estimates compared to last year (from GBP 57.9 million in 2022 to GBP 39.9 million this time around). In addition, similarly to what went down in Hong Kong, this sale once more generated a revenue (GBP 30.12 million) inferior to the sum of its low estimates. On the other hand, “The Now” Evening Auction, which took place right before on the same night, did better than last year by a solid 36%: from GBP 11.38 million in 2022, it managed to garner GBP 15.5 million this year. It also had 23.5% more lots to offer than last year (from 17 lots in 2022 to 21 this year), realized three artist record prices in total, and generated a revenue which largely exceeded the sum of its low estimates (GBP 9.4 million). If we now turn to Phillips’ main evening sale, it did a comparable result to last year (GBP 18.8 million in 2022 and GBP 18.3 million this year) with much more lots (37 lots in 2022 and 42 lots this time around) and many works sold off at a loss by their owners. Hence, far from demonstrating a certain degree of art market stability, this sale was a positive result only on the surface of it. But upon witnessing these once more disappointing indicators of the state of the art market, one must also keep in mind that the London auction results are impacted by a shift of tides on the European art market in favor of Paris: this was exemplified for the second consecutive year by the migration of Christie’s « Thinking Italian » from London to Paris. In other words, the drops in auction sales revenue in London are accentuated by this shift: they would have been less dramatic without such a change. Is it thus important remind ourselves of this trend, so as not to overplay the disappointing London figures or the rather positive—as we are about to see—Parisian ones: the truth on the state of the European art market is somewhere in the middle.

The highly successful art fair Paris + by Art Basel, which performed better than Frieze London this year—another indicator of the change of tides.

Lastly, the Parisian auctions could almost be seen as being “on a tear” given the general crisis of supply and demand. On the face of it, Sotheby’s started things with a bang on October 19, by increasing its sales revenue by 71% compared to last year’s comparable “Modernités” auction (from € 21.88 million in 2022 to € 37.49 millions this year). Interestingly, this was achieved with 15 less lots than in 2022—a telltale sign that the general quality of the lots on offer this year had increased dramatically at Sotheby’s Paris, and a remarkable feat with the ongoing crisis of supply on top-end lots at auctions, which we had discussed at length in our previous article. But upon closer look, not only did the sale end up having seven lots bought-in and a mediocre sell-through rate of 81.6%, but it also had very disappointing prices on a few artworks by major figures of modern art such as Jean Dubuffet and René Magritte. As for Christie’s “Thinking Italian” evening sale on October 20, it almost reached the numbers it had made last year, only lagging behind by 7%: this year, sales revenue was up to $ 62.32 million, compared to 2022’s € 66.69 million. So, although in this case sales revenue was generated with ten more lots than during the 2022 equivalent sale (61 lots compared to 51), it still showcases a relative stability of the main fall evening auction by the Parisian department of Christie’s. However, once again, the part played by the "tilting" effect in the balance between London and Paris cannot be overstated: it makes as little sense to completely despair at the sight of the British results, than to be in awe of how well the French capital seems to be doing given current events.

Joan Miró's beautiful "Peinture (Femmes, lune, étoiles)", produced in 1949, on sale at the "Avant-garde(s) Including Thinking Italian" auction by Christie's Paris.

All in all, what can be inferred from this fall’s auction season so far? One thing is certain: we are still living the same troubled times of price corrections that started about a year ago—something which might be in the natural order of things after the period of excess we witnessed in late 2021/early 2022 post-covid, where all figures were at a historical high. But as we have seen, auction revenues are not plummeting at increasingly faster rates year to year and across the board: the results so far have been more nuanced, with even surprising and encouraging figures at times. In short, the art market crisis continues—no one could argue against that—, but without deepening. If anything, it was still on the Eastern front (namely, in Hong Kong), that auction sales were the most alarming—a rather unsurprising fact given the “time off” China took from partaking in the art market as a whole in the last few years since covid broke out. Regarding the disappointing London sales, which were however already showcasing more contrasted results than in Hong Kong, one should only consider them within the general setting of the European art market and its shift of tide in favor of Paris. Needless to say: the same goes with the surprisingly positive revenues generated in Paris. Hence, if the art market is most definitely not in great shape, nothing indicates that we are only on the doorstep of a much deeper crisis; it rather seems that we are currently well in the midst of the crisis and most of what is has to “offer”. The upcoming evening sales of November in New York are the last and most important indicators to closely watch as they unfold: they will definitively tell us where we are at for this auction season. But collectors on the quest for bargains on beautiful artworks would once more be advised to (carefully) bid at those auctions…



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