Art Sales Tumble: Christie's Reports 38% Plunge In First Half Sales

One month ago, Bank of America said that "We Do Not Have An Explanation" - when it observed that spending on luxury items had unexpectedly tumbled into the summer.

And while we don't know the specific catalyst that has led to such a notable slowdown in spending by the wealthiest part of the population, we have yet another confirmation that it is continuing, nowhere more so than in the world of "luxury" art. As the WSJ reports, London-based auction house Christie’s International offered further proof of a downturn when it said it sold $3 billion in art during the first half of the year, down a third from the same period last year. Christie’s latest total included $2.5 billion in auction sales, down 37.5% from a year ago. Its $464 million total in privately brokered art sales also fell 10% from the first half of 2015. Contemporary art, long the engine of Christie’s market dominance, was hardest hit, its $788 million in auction sales down 45% from a year earlier.

As the FT adds, in the first half of the year, sales in America totalled £729.8m, down by almost half from the same period last year, Christie’s said. Sales in Europe, the Middle East, Russia and India shrank 12 per cent to £736.5m, while Hong Kong contracted 11 per cent to £256.5m.

The London-based auction house, which is celebrating its 250th anniversary, said there was a fall in the number of works priced above £20m at auction. Despite that, smaller ticket sales and transactions conducted online strengthened: there were 36 per cent more new buyers of works between £1m and £5m, and e-commerce jumped 96 per cent.

Christie’s, owned by French billionaire François Pinault, is coming off its second-best year ever, buoyed by online bidding, curated auctions — which span classifications and time periods — and a group of new buyers. Its rival Sotheby’s said sales totalled $2.4bn this year through to June 30, though that does not include private sales, which are recorded in Christie’s figures. For Sotheby’s this is down from $3.1bn in the same period last year.


Sales in the global art market declined 7 per cent over the course of 2015 to $63.8bn, according to the industry benchmark Tefaf Art Market Report. After years of rising prices lured in new buyers, volatility in financial markets last year started to cool demand. For top lots, prices continued to soar, while other items failed to sell.

Sotheby's didn't fare better: the New York-based auction house said it auctioned $2.4 billion in art during the first half, down a quarter from the year before. Both auction houses said their six-month totals represented sales through June 30. Sotheby’s is scheduled to release its consolidated sales, which include private art sales, next month.

The steep dropoff in sales has prompted concerns that the market was wobbling, making collectors less excited to part with their treasures. "Where before auction houses had extended generous guarantees, as their competition to lure consignors to market intensified, they have now cut these back, scaled down the size of the sales, and are trimming staff."

A big reason for the drop was the disappearance of the heretofore relentless Chinese bid. Like its overall art sales, Christie’s sales of Asian art were down by a third during the first half, to $310.2 million, although the house fared well with a curated, cross-category sale of Asian Art in Hong Kong in May that totaled $81.7 million, with 40% of the offerings selling above their high estimates. This included a blue-and-white jar adorned with dragons that sold for $20.4 million. Sotheby’s, for its part, also managed to claw back some market share in this category, selling $460 million worth of Asian art during the first half of the year.

Curiously, collectors from the U.S. and Europe outspent all rivals this spring, each region taking home $1.1 billion of art from Christie’s. Asian buyers won 28% of Christie’s offerings world-wide.

For the art buyers out there, the FT adds that the market is increasingly polarised, with most of the value concentrated in the postwar and contemporary and modern categories, and in sales at the highest price levels, according to Tefaf’s report. Furthermore, the slump is not uniform: Christie’s also noted that “demand for masterpieces by top collectors continues”, with 88% of all works costing more than £5m being sold. This year Christie’s has set new auction records for artists, including Jean-Michel Basquiat, Henry Moore and Frida Kahlo.

According to the WSJ, "masterpieces proved more difficult to wrangle in the first half as sellers chose to ride out the market’s uncertainty rather than push their priciest pieces into the fray. Christie’s said only 29 artworks it sold during the first half achieved prices exceeding $6.5 million—compared with 47 the year before—with nothing selling for anywhere close to the $180 million that Pablo Picasso’s “Women of Algiers (Version O)” brought in 2015."

Those curious if the summer swoon is a one-off event will have to wait. The art market tends to quiet down in late July and August but will get tested again at sales throughout the fall in London, Hong Kong and New York. With the S&P at all time highs, with Brexit in the rearview mirror, and with China pumping trillions in new debt, there will be no more easy "scapegoats" if the luxury spending doldrums continue.