Asian collectors were at the forefront of the recent boom in the art market. Now they pump the brakes

The Art Detective is a weekly column by Katya Kazakina for Artnet News Pro that lifts the curtain on what is really current on the art market.

The art world is in a funny place right now. It emerges from a stack of auctions, art fairs and biennials so massive that it almost makes you nostalgic for the lockdown break. Ahead… is a bunch of questions. Are we headed for a recession? Which bubbles will burst? Who will remain standing?

Amid the euphoria surrounding the return to live events, it was easy to miss some dark clouds forming over Hong Kong, where evening sales of modern and contemporary art at Christie’s, Sotheby’s and Phillips were down 30.2% from a year earlier, according to ArtTactic.

“It’s hard to say whether these results are signs of a cooling Hong Kong art market or a market that’s just catching its breath,” the company’s report said.

Asia has been a key driver of art market growth since the pandemic, ushering in a wave of new buyers and rampant speculation for popular emerging artists. The downturn may be the bleeding edge of the current boom, with ripple effects for the entire market. Or it may be a temporary setback driven by macroeconomic factors, such as local currency fluctuations and pandemic-related restrictions.

“The market is getting colder,” said a Hong Kong-based collector Jacobo Garcia Gil. “The last few years, it was a bit crazy. Many sales have been made with white gloves throughout the pandemic. The rest of the art market was contracting, but Asia was booming. In 2020, the country briefly overtook the United States as the world’s largest art market.

But after two years of relative normalcy behind closed borders, that all changed in March, when the virus began to spread and the government instituted draconian new restrictions. Collectors”weren’t in the mood,” one adviser noted. “They said: I fight for food. I’m in no mood to fight for art.

Sotheby’s Hong Kong. AFP PHOTO / Anthony WALLACE via Getty Images)

A muted Hong Kong

MThe absence of Mainland China was felt in Hong Kong sales. Christie’s is doing the best of the three houses. It totaled $428 million in a marathon auction held in the last week of May, down from $458 million in May 2021. The evening sale of 20th/21st century art was down by 10% over the previous year, to $231 million.

Sotheby’s slew of sales across various categories in April totaled $496 million, the highest total for the venue since 2013. But modern and contemporary evening sales fell 30% to $198.8 million . from 2021.

Phillips has had the worst of it as his collaboration with giant Poly Auctions did not go through this time around. The evening sale of 20th Century and Contemporary Art brought in $45.5 million on June 22, down nearly 50% from the 2021 “white glove” extravaganza.

Another indicator of a cooling auction market in Asia is a lower price/estimate ratio. Take the painting by Emily Mae Smith broom lifewhich soared to $1.7 million at Phillips Hong Kong last June, 22 times its high estimate of $76,900. (Prices include fees, estimates do not.) Not a single batch exceeded expectations this year. The highest ratio belonged to the painting of Louise Bonnet, The ice skaterwho reported $573,525 at Sotheby’snearly 13 times the high estimate.

Artists who were super hot a few more seasons ago are no longer peaking. Amoako Boafo’s works sold for multiples of their estimates in Hong Kong a year ago. This time around, the Ghanaian did not make it onto ArtTactic’s top 25 artists list in terms of price/estimate ratio, which started at 2.8 times.

Emily Mae Smith, Broom Life. (2014) Image courtesy of Phillips and Poly Auction.

Emily Mae Smith, broom life.(2014) Image courtesy Phillips and Poly Auction.

Other wet paint artists including Mae Smith, Jadé Fadojutimi and Loie Hollowell were also not on the list. And neither did Matthew Wong.

New names are on the rise, however, including Anna Weyant, whose 2020 still life, Josephine, sold for $513,840, nine times the high estimate, at Sotheby’s Hong Kong in April. At Phillips Hong Kong, Lucy Bull’s monumental 2020 canvas titled 8:50 am went for $1.4 million, or 7.6 times the high estimate and a new record for the artist. Advisors report continued demand for artists like Nicolas Party and George Condo.

“It’s really difficult for emerging artists,” said a prominent Hong Kong-based adviser. “The cycle is extremely short. You are consumed and people move on. And it’s fascinating how fast they’re moving.

Meanwhile, in Korea…

Korea, which is vying to become Asia’s premier arts hub with the debut of Frieze Seoul, has had its own set of problems. The South Korean won has lost 14% of its value against the US dollar over the past year, falling 3.3% in the last month alone.

“As far as my clients are concerned, [the value of the] The Korean won is a very important factor,” said the Minneapolis, Minnesota-based Connor Remes, who advises young Asian collectors.

I heard the story of a Korean collector interested in buying an artwork from an American gallery at a major international art fair recently, only to backtrack after checking the rate conversion. (This, one adviser pointed out, may have been a convenient excuse to avoid buyer’s remorse.)

installation view, "Rafa Silvares: AIRBAG" at Peres Projects in Seoul.  Courtesy of Peres Projects.

Installation view, “Rafa Silvares: AIRBAG” at Peres Projects in Seoul. Courtesy of Peres Projects.

The Asian market is, of course, made up of many small regional markets. Just as collectors have gathered around Hong Kong auctions to offer a stress test, Frieze Seoul will be another this fall.

Garcia Gil noted that collectors coming to the new fair should expect to pay 10-15% more due to currency conversions. This may end up stifling a few transactions, but it’s also a boon for local dealers who accept Korean Won.

“People are very aware of the ups and downs of economic indicators,” said art dealer Javier Peres, who recently opened a Gallery in Seoul. “It’s something that people normally bring up in conversation. But for us, it has never really been a factor in our day-to-day activities.

In fact, Peres plans to expand to the nation’s capital right after three shows, which have all sold out, he said.

“The people we work with expect top quality products,” Peres said. “They don’t want to play. As long as you bring the goods, they are with you.

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