Culture

16 March 2016

Oil on canvas 

Global volatility, economic weakness in China and the plunging price of oil and other commodities are having a serious impact on the once-booming fine art market. Wealthy Chinese, Russian and Middle Eastern buyers, in particular, have been obliged to tighten their belts.

The latest report from the European Fine Art Fair, which opened last week in Maastricht, indicates that if the fine-art bubble has not actually burst, it is certainly slowly deflating.

The global market, including both auction and dealer sales, shrank by 7% to $63.8 billion in 2015. Many analysts are predicting a further decline this year. 

A significant part of the problem is the malaise in China, previously a mainstay of the art market, where total sales fell by by 23% last year. The report’s author, arts economist Clare McAndrew, says that a clampdown on corruption has also discouraged ostentatious spending. 

Brazilian and Russian buyers have also lost enthusiasm as their commodity-powered economies have plunged into recession. The picture wasn’t much better in more buoyant countries: the UK market, for example, saw a decline of 9% in 2015. 

This is denting volumes at major auction houses Christie’s and Sotheby’s. Auctions staged by the two groups in February generated $210 in sales – down 45% from $381 million a year earlier, after both companies reported a slight decline in 2015 turnover. 

Famous works are now commanding lower prices. Notably, Picasso’s Tête de Femme recently changed hands for £18.9 million at Sotheby’s, compared with £28 million when last sold in 2013. 

Experts say that we are likely to see two key consequences of the current downturn. First, fewer works will come onto the market, as sellers wait for prices to rebound. Second, less well-known artists, the price of whose works tends to fluctuate, could see a significant decline in popularity. 

At the same time, given the relatively cyclical nature of the market, some collectors may start seizing this opportunity to take home bargain-basement masterpieces.