HOW LONG CAN THE ART MARKET WALK ON WATER?

How long can the art market walk on water?

The wealth of the super-rich is keeping the miracle going but mostly for the best works

By Charlotte Burns. Market, Issue 237, July-August 2012

Published online: 05 July 2012

The top end of the art market appears to keep climbing, despite fresh crises in the currency and banking markets and ongoing turmoil in the Eurozone. The reportedly strong sales at Art Basel (13-17 June) indicate a buoyancy bearing little relationship to the problems in the global economy and the fact that major financial institutions are still struggling with risk management—J.P. Morgan was one of several banks to be downgraded by the credit agencies in June after losing $2bn in trades of illiquid credit derivatives. Meanwhile, according to a report in the New York Times, the growth of the art market is outstripping GDP (gross domestic product).

The $78m price tag for Untitled, 1954, a large orange canvas by the late Mark Rothko offered by Marlborough Gallery at Art Basel, was both a statement of intent and an indicator of confidence, at least at the very top level of the market. Works of this quality are rarely offered so openly by dealers, but the piece had been coaxed out of a private Swiss collection after the record-breaking $86.9m sale of another work by Rothko, Orange, Red, Yellow, 1961, at Christie’s a month earlier. “The best art has proved resilient.

Art Basel, and the quality it purveys, proves rather reassuring in such turbulent times,” says Andrew Renton, the director of Marlborough Contemporary. The 1954 Rothko was yet to find a buyer as we went to press, though Renton says that there are “very serious offers under discussion”.

Remarkably, 11 of the top 20 works ever sold at auction have hammered down since 2008, including the top three lots, which have all sold for more than $100m since 2010. New records have also been consistently set for individual artists. There was excitement at Christie’s sale of contemporary art in London on 27 June when a record £12.9m ($20.2m) was paid for Jean-Michel Basquiat’s Untitled, 1981, breaking the previous record of $16.3m, set in May at Phillips de Pury in New York. This came 22 lots after a new record was set for a work by Yves Klein, when Le Rose du bleu (RE 22), 1960, sold for £23.6m ($36.8m), edging past the $36.5m record paid at Christie’s New York—again, just a month before.

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