Prices reach peaks, customer confidence decreases

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Prices reached the top, customer confidence decreases

Journal AZHEFI (AGEFI)
25.07.2008

Works of art are one of the few investments that can bring more profits. It seems that due to the activity of several billionaires financial crisis does not affect them. Recent London auction again beat several records. But while prices have reached new peaks, the trust of collectors is reduced.

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A barrel of oil reached 150 dollars, the texture sub-awards is becoming more serious, real estate prices are falling all over the world, financial markets are falling, inflation is becoming a tangible ... In this context, the results of the auction Christie's and Sotheby's are striking. In London, the capital of European art market, both auction houses have confirmed that the art market in excellent health. Their trades were waiting with impatience, and need to recognize that despite the unfavorable economic climate, were riddled with numerous records. Bidding Christie's on June 24 (Impressionism and modern art) yielded 144 million pounds - an unprecedented result in Europe. The next day, Sotheby's realized revenue of 102 million pounds, that is, 7 million more than the sum of upper bounds. "Water lilies" Monet sold for 36.5 million pounds, today the price index of the Impressionists rose by 13%compared with 1990, in the midst of a speculative bubble. Total 20 lots of 136 remained unsold - less than 15%- a low number of the remaining unsold lots surprising even for such prestigious auction. In May, at New York auctions of impressionist and modern art remained unsold for about 23%of lots. The vast majority of buyers were Europeans. At Sotheby's auction, they bought 70%of the exhibited works.

To meet the wishes of the new collectors, Christie's put a large number of works by Russian artists. Artworks Baranova-Rossine, Vera Rokhlin and Natalia Goncharova broken all records of trades. Goncharova, whose still life "Flowers" went for 4.6 million pounds, became the most expensive female artist of the market. /.../

Euphoria swept the entire market of art. At the international level index Artprays (Artprice Global Index) on 1 st July 2008 stood at 128 points in euros and 175 dollars (the level in July 1990 adopted by over 100 points). The art of any era and any quality has never been so expensive!

In parallel with these incredible results of the auction has been a month, as an indicator of market confidence of Art (Art Market Confidence Index Artprays) continuously decreases. This indicator is to anticipate the behavior of the market with the horizon of 3 months, similar to the index of consumer feelings Survey Research Center at Michigan State University. Vysshchayshego reached the level of 31 points in late May, after the excellent results of trades in New York, he became progressively lowered, following the specter of global economic recession. Despite the good results of the London trading, market participants all the anxiety increases. On June 9 AMSI reached 24.3 points, 15 of July it fell below 0. In response to the deteriorating global economic situation, the number of market participants who intend to continue to acquire works of art, continually decreases, and their opinion about your financial situation is becoming more pessimistic, as well as their vision for the evolution of prices.