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November sales: the slowdown of the art market is here

Updated: Apr 26, 2023



The last big auction season of the year has come to an end: the 2022 November sales are over, and the art market can finally reflect upon itself. The troubled international context of the last two years had surged legitimate concerns that the art market would go through a form of recession, or at least display a considerable dip in sales. After a market high during the auction season of May 2022, the disappointing sales of late June/early July momentarily refueled that fear. But what can be learned from last month’s auction season?


As we had previously mentioned in an article published this summer, one of the main factors that would be a telltale sign of the market’s future is the comeback—or lack of comeback—of Asian collectors on the art scene. Covid-19 restrictions had indeed taken a toll on their ability to leave their countries, and considering China was responsible for 40% or art sales proceeds in 2021 (Artprice report), it only makes sense to keep an eye on this indicator. The good news is: Asian collectors are indeed slowly making their comeback. Their partial return was already noted during Frieze London and Paris + by Art Basel which directly preceded the November sales. But the auction sales themselves confirmed this fact: for instance, more than half of the $ 45.8 million proceeds for Sotheby’s “The Now” evening auction was attributed to Asian buyers. This is a positive sign for the global art market, which is increasingly fueled by Eastern collectors. As Artprice notably reported in “The Ultra Contemporary Art Market in 2022”, South Korea just dethroned Japan, making it to the 5th spot in the ranking of contemporary art auction turnovers from July 1, 2021, to June 30, 2022. Thus, even amidst the ongoing aftermath of the Covid-crisis, Asia managed to snatch about a third of the global contemporary art market shares from mid-2021 to mid-2022, despite China’s 33% dip in sales on that segment during the same time span. It should also be noted that the recent protests in China are starting to generate more leniency from the Chinese government in terms of Covid restrictions—another encouraging sign for the future of the Asian art market. However, the comparison of this fall’s Modern & Contemporary Art sales in Hong Kong to those of last year remind us that progress on the Asian front remains timid: as the Art Newspaper reminds us in its November 23 article, auction turnover has dropped 38% on that segment compared to last year.




"Loose screw" by Anna Weyant

Last summer, there was also concern regarding the future market valuation of the young stars of “ultra” contemporary art. Paintings by the likes of Anna Weyant, Christina Quarles or Shara Hugues had indeed realized disappointing prices during the auction sales of late June and early July. But if the November auctions tell us anything, it is that this segment has proven to be relatively resilient despite the downturn of the art market. A few of these artists just had conservative auction results, bringing the valuation of their works a tad behind—although in the same range as—the prices realized in May for comparable pieces. For example, the two historic records for paintings by Anna Weyant were set during last May’s auction season: Summertime (2020) was sold for $ 1.5 million at Christie’s New-York on May 10 and Falling Woman (2020) for $ 1.623 million at Sotheby’s New-York on May 19. In comparison, her painting Loose Screw (2020)—with identical dimensions to her alltime record—was just sold for $ 1.5 million on November 17 at Christie’s New-York. But on the other hand, other rising stars such as Pakistani artist Salman Toor just achieved some of their highest auction results this fall: Four friends (2019) by the young painter was sold off for $ 1.562 million on November 16 at Sotheby’s New-York. The next day, however, 4 Guests (2019)—a painting of roughly the same size—was auctioned off for $ 856,000 at Christie’s New-York. Zooming out of this relatively short time span that is 2022, the Artprice report on “ultra” contemporary art that came out recently provides a better insight on the general trend for this segment of the market. Between July 1, 2021, and June 30, 2022, these artists under 40 represents 2.7% of art market sales as a whole and 15.5% of contemporary art sales, with a total of $ 419 million in sale proceeds. The comparison to the numbers of the same period from twenty years ago is quite shocking: since 2002, the number of transactions for works by artists under 40 has been multiplied by 7 and auction turnover for this segment of the market has been multiplied by 26. But even more telling is the comparison to the market of 2014 for the same period: the share of global fine arts auction turnover generated by ultra-contemporary artists has been multiplied by 2.7 in the last eight years (see graph below). The share of this segment of the art market has hence grown faster than ever before over the last decade: it was multiplied by 1.8 between 2002 and 2010 and by 2 between 2010 and 2020—compared to the 2.7 realized between 2014 and 2022.


Zooming out even more, this makes sense when considering the evolution of the contemporary art share within the general art market. The global turnover for contemporary art sales has doubled in the last decade and is 31 fold what it was twenty years ago. During this same 2021/2022 period, it represented 17.6 % of the total art market with $ 2.7 billion in sale proceeds, compared to the $ 2.73 billion of 2020/2021. This means that despite a drop of 33% of Chinese sale proceeds, the global contemporary art turnover only contracted slightly (-1.1%). As Artprice concludes in its report: “Without China’s zero-covid policy and based on data for the last five years of China’s Contemporary art market, the global Contemporary art market would have grown by +9%.” Meanwhile, during these last two decades, the unsold rate remained relatively stable, at around 33%. This reflects a structural dynamic at play: the vast expansion of the buyer base in an increasingly globalized art market. The vast amounts of liquidities that are readily available to be poured into the art market automatically make it necessary for the contemporary and “ultra” contemporary art segments to keep growing: after all, there is only a very small and finite number of Basquiat or Van Gogh paintings available… The global competition to be the hub that gathers the most valuable assets is therefore all the rage. New-York, Hong-Kong and London still lead the dance, but other players are trying to step their game up as we’ve seen with the rise of South Korea and the recent comeback of Paris on the contemporary art scene. Despite this general trend regarding liquidities, it should once more be noted that Artprice’s report only accounts in the first half of 2022. In other words, this fall’s auction sales may well have reshuffled the deck—as we’re about to see.



Now, comparing the sales of last May to those of November on the broader scale of the general art market, one can indeed see a few notable differences. The first is that during the May auction sales, many artworks completely exceeded their high estimates, whereas artworks were sold well within the bounds of their estimates during the November season—many only attaining their low estimate once the buyer’s premium had been included. All in all, the November sales were indeed less bullish than the ones of May. Last Spring, Sotheby’s New-York had reached the threshold of a billion dollars in sales within the opening week, and this time around the auction house attained a lower figure of $ 856 million. On the Asian front, things were not much better. At Christie’s Hong Kong, the evening art sales reached a total of HK$ 817.8 million ($ 104.8 million), which represents about half of the amount gathered over the past three editions of evening art sales that were held by the auction house. For instance, if we compare both 20th/21st Century Art Evening Sales from May 26, 2022, and November 30, 2022, the numbers are quite telling: the first generated HK$ 1,407,783,00 (58 lots) whereas the second one generated HK$ 678,210,000 (51 lots). In addition, there was generally a lesser number of lots and many of them were even withdrawn prior to the sales—which is practically the equivalent to considering them “unsold”, as auction houses typically withdraw lots if they fear they might not find a buyer at a price at least close to the low estimate. And indeed, Christie’s had initially announced an estimate of HK$ 1.7 billion a month prior to the November sale, before changing it to HK$ 616/916 million shortly after. But a few high value lots were withdrawn prior to the sale and others were left unsold. For example, works by prominent 20th century artists Zao Wou-Ki and Wu Guanzhong failed to sell…


"Les Poseuses (Ensemble)" by Georges Seurat

But that’s only half of the picture. Other figures indeed tip the balance between May and November in favour of the most recent sales, thus masking the less than satisfying results we just mentioned. Initially, the second part of the Macklowe collection sale at Sotheby’s in May had managed to bring its total sales to a staggering $ 922 million (the first part had taken place during the previous auction season, in November 2021), making it the most valuable collection ever auctioned off, at the time. That figure was then crushed this November with sale of the Paul G. Allen collection at Christie’s, which generated $ 1.5 billion. Interestingly, Asia only represented 12% of acquisition at this sale, whilst half the lots were garnered by American buyers. These great collections gave us another chance to witness something that was expected, regardless of the economic context: top-tier collectors making sure not to miss once-in-a-lifetime opportunities to acquire bulletproof works by “blue chip” artists—whose prices thus keep rising. Sold for $ 137,8 million on November 9, 2022 (hence beating the artist’s previous record, set at $ 60.5 million in 1999), La Montagne Sainte Victoire by Cézanne had been acquired by Allen for $ 38.5 million at Phillips in 2001. Similarly, the historic peak for a work by Seurat was also reached during the “Visionary” auction: $ 149 million for a small but extraordinary painting by the Pointillist master—more than four times his previous record of $ 35 million (also from a 1999 auction).


However, the record-breaking results of the Paul Allen collection should not blind us as to what really went on during these November auctions: the collectors of such works of artare the exception rather than the norm. In truth, what was displayed during this auction season was a shortage of buyers. Consequently, many lots were withdrawn and those that remain achieve the high prices that sellers had hoped for, thus generating the illusion that all is well that ends well—if one just looks at the newly set records, that is. In summary, it is safe to assume the contemporary segment of the market still has a bright future ahead in the long term: the safe-haven aspect provided by art in the context of an ever more globalized art market will most likely continue to provide a steady-paced increase in value, despite the dips in sales that could occur at any moment should the economic crisis deepen. But collectors must also understand that, beyond a doubt, were a currently amidst a downturn of the art market, that may well last until the next major auction season—in Spring 2023. It is thus hard to acquire good artworks at reasonable prices and just as hard for sellers to find buyers in many other cases. Consequently, the “ultra” contemporary segment remains a part of the market that should be navigated with caution and linked to aesthetic and institutional value to mitigate risk. If the November sales have shown anything, it is once more that prices for works by young artists can be volatile at times, whilst the artists that are the bedrock of Modern & Contemporary art continue to rise steadily.

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