But perhaps there exists a different scenario based on a more recent precedent, one less dire than the shock of the historic corrections of 1991 and 2008 – one that could have a more positive affect on the health of the art market: the Asian art sector mini-correction of 2012.
For those not close to the Asian sector, from approximately 2003 onward its performance was an even more extreme version of the growth in the overall art market, with record price increases and ever larger and more eye-popping auction sales until the market dislocation in 2008. When the art market revived in 2010, the Asian sector came back even more quickly and vibrantly than other sectors, to the extent that buyers in mainland China were scouring the websites of small regional auction houses in the US and the UK looking for not only the next big find, but also little ones as well. In the heat of the frenzy many mistakes were made, many fakes purchased, and many auction sales unpaid for. The most conspicuous of which was the world record Famille RoseQianlong Vase sold at the small UK auction house Bainbridges for USD 81.6 million where the purchaser defaulted. By 2012, it became apparent that much of this hyperactivity was fueled by a credit glut on the Mainland, which led to speculation in hard assets such as art and real estate.
When credit eventually tightened in China, buyers, suddenly of necessity, became more wary and sophisticated. And while the market slowed, it did not crash. Quality still sold; even though sales returned to the old normal of higher unsold rates, the market remained fundamentally sound and active, if more chastened and conservative. Most of all, longtime Asian dealers and collectors breathed a united sigh of relief: the market had adjusted without swinging the pendulum too far to the other side. Could some version of this be more likely for the broader art market rather than another boom-bust cycle?
The global art market is undeniably changing: collectors of Contemporary Art are moving further back into the Twentieth Century, both for value and out of intellectual interest; by most anecdotal accounts last month’s Frieze Mastersfair in London seemed to be more popular with collectors than the cutting-edge original Frieze fair itself; many dealers in New York and London are downsizing or moving to non-street front locations in acknowledgement of the fact that more sales are taking place at art fairs; the majority of collectors now follow a clearly established annual circuit: October in London, November in New York, December in Miami, March in Maastricht and Hong Kong, May in New York again, and June in Basel; and auction house guarantees are making it extremely difficult for secondary market dealers to compete for material. The one advantage of a “cooler” art market is that auction guarantees become scarce, making the playing field a bit more level for the Trade.
So maybe we are already in a new normal, and instead of trying to predict the next crash, we should readjust our expectations towards a more conservative marketplace where old-fashioned connoisseurship begins to trump the new hot thing. A real test of this theory will be coming this week with the sale of the collection of A. Alfred Taubman. Despite his controversial relationship with the art industry, he was indeed one of the great connoisseurs of the last thirty years, and Sotheby’s has bet heavily that the market will once again highly value such a thing. Whether or not Sotheby’s makes a profit is another matter, but even in a cooler market, quality should sell.