IN THE week that his hotly anticipated 40-year retrospective opened at Edinburgh’s National Gallery Complex, German artist Gerhard Richter – the man dubbed Europe’s greatest living painter – has attacked the staggering prices that the international art market has notched up in the past decade. Even the price tags on his own paintings, which tipped £7 million earlier this year, he says are “too high”.
The painter of giant, vibrant tableaux expresses scorn for the auction antics of celebrity artists such as Damien Hirst. “This has to do with these mad prices we have now, because we are losing our culture, when you see the auction catalogues full of bulls*** and hype,” he says.
Aside from the very greatest Old Masters, Raphael or Leonardo, “paintings shouldn’t cost more than a million”. Asked if he thinks auction prices are now falling, he says, “I hope so.”
Richter is, however, a huge admirer of Titian, on whose Annunciation he modelled five works of his own, and whose Diana and Actaeon the National Galleries of Scotland are trying to retain for a price of £50 million. That is a special case, he says, and is “out of my competence”.
A few days ago the Art Newspaper published figures on the astonishing growth in value of contemporary art sold at auction over the past few decades. From 1984 to the end of September 2008, average prices for the top quarter of art sales rose from $20,000 to $660,000 – up by 3,100 per cent.
In the top 10 per cent, the average price grew from $43,000 to $2 million, a gain of nearly 4,400 per cent. After rising steadily from 2000, growth went wild in 2006.
Richter, along with the art world’s critics and Cassandras, however, may finally be about to see their gloomy predictions realised.
Over the past few months, as the credit crunch has made its impact felt, art dealers and auctioneers have clung to the hope that the art market may be one of the few sectors able ride out the recession.
For a while, the see-sawing results seemed to bear them out. Each poor sale in New York or London that brought warnings of a downturn would be followed by one that saw stellar works break multimillion pound records.
Serious jitters took hold at the end of last week, however, when auction houses struggled to find buyers for works from Manet and Renoir to Rothko. In New York, two private art collections expected to fetch more than $100 million (£63 million), brought in less than half that. The sale, at Christie’s auctioneers in Manhattan saw 17 out of 58 works failing to sell and others bringing much lower prices than predicted. Toulouse-Lautrec’s Portrait de Henri Nocq, estimated at $6-8 million, sold for $4.5 million.
As the week progressed, one Picasso painting went for more than $20 million but two others remained unsold. “Obviously in the future we will have to lower estimates,” said Christie’s honorary chairman and auctioneer Christopher Burge, though he insisted “there is still a great deal of money left for the art market”.
Sotheby’s turn came when the Russian masterpiece View of St Petersburg by Alexei Petrovich Bogliubov, with an expected price of up to $3 million, failed to get a single bid. Russian oligarchs’ buying sprees had been keeping the market buoyant, but the Russian stock market has been hit harder than almost any other.
In the Scottish market there is also nervousness. A new world-record price was set for a painting by a Scottish Colourist late last month, when Roses, a still-life by the artist Samuel John Peploe, sold for £529,750 to an anonymous buyer. But some other Colourist works in the same auction went unsold. Auctioneers repeat the mantra that top-end paintings will always sell well, but it is the middle market that may suffer.
The ‘people’s painter’, Jack Vettriano, may be feeling the pinch. Art-market observers have pointed to his portrait of Zara Phillips for Sport Relief: there was was press hype that it would fetch £1 million, but it raised only £36,000 in the charity’s auction.
The fear factor is high. This week, Sotheby’s and Christie’s are holding their sales of contemporary and post-war art, the sector where the biggest price spikes have occurred and which may have further to fall.
Putting an overall figure on art price rises is a struggle. Every work is differently valued and the identity of buyers and sellers are shrouded in secrecy.
But some buyers, it appears, were snapping up contemporary art because they were convinced its price would leap before they sold it on – a classic market bubble.
The Mei Moses Index, published on
artasanasset.com, is one gauge of growth. Over the past five years, it has claimed an annual compound return on art of about 20 per cent, said Michael Moses, the US finance professor who founded it.
“We did an update of our index at the end of October,” he said. “At that point, basically we had shown it was down by about 5 per cent. Who knows what will happen when we include the November and December sales, which seem to be weak?”
Another measure of the lack of confidence is Sotheby’s own share price. At the end of October 2007, Sotheby’s shares were trading at $55; a year on they were at $8. Auction houses have tightened credit for customers, insisting they pay for their paintings before walking away. They have also lowered the secret reserve prices for artworks, below which they are not sold.
The troubles of auctioneers even in Asian markets now have dealers worried. “We haven’t seen any downturn in our business but we are seeing it in the auctions, and we expect it to happen,” Katie de Tilly, the owner of the 10 Chancery Lane gallery in Hong Kong, told the Reuters news agency.
She will halve the number of shows this year, given the bleak outlook. “If you are investing in art, keep your eyes open – very open – right now, because I can see things coming down in a big way.”
BACKGROUND• GERHARD Richter’s international reputation took a huge leap with a retrospective show of his work, which toured the US after opening at New York’s Museum of Modern Art (MoMa), in February 2002. It also brought a dramatic increase in his prices. In 1994 one of his prized Kerze, or Candle paintings, from the early 1980s sold for more than $300,000. In May 2002, one sold for $3.6 million, the top price for Richter in that year. This February, a 1983 Candle, the one used for the cover of the band Sonic Youth’s album Daydream Nation, sold for £7.1m at Sotheby’s. A 1982 version is in the National Galleries of Scotland show which opened at the weekend. Two of Richter’s strikingly different Abstraktes Bilds (colour abstracts) went for similar sums in May.
• In February 2007 White Canoe, a painting by the Edinburgh-born Peter Doig, sold for £5.7 million at Sotheby’s, making him, at the time, the most expensive living European artist. Owned by Charles Saatchi, it was sold to an anonymous Russian bidder. The work was an exception, with Doig’s works mostly fetching £1-2m at auction. But the painter said the prices made him “physically sick”, and he’d been happy when his works sold for £300,000, about the price fetched in 2002.
