It is a headline that strikes fear into the hearts of the people who make their living selling art and the shortsighted speculative art buyers who ultimately drove the market to the brink of collapse alongside the economy last year. For serious art collectors and sensible artists who managed to avoid the temptation of price gouging in the recent market, however, it is a call to arms: 2009 is a year to BUY art. The news comes today via the FINANCIAL TIMES who report that the average prices of high end work has dropped a whopping 35% after enjoying an average annual appreciation rate of 20% over the last decade. It’s the largest decline since 1991 when prices fell a record 41%. Perhaps Damien Hirst’s greatest talent isn’t art after all, but rather timing:
Art prices plunged during the first quarter of the year as cash-strapped collectors looked to unload works by postwar masters that had earlier boomed in price along with the stock market.
The Mei Moses index, set for release on Tuesday, shows art prices fell 35 per cent in the first quarter, having held up during earlier months of the financial crisis.
The overall index fell 4.8 per cent last year.
The decline accelerated as people who lost money in the financial crisis, including victims of the Madoff fraud, put up works for sale, often at a loss, several art world insiders said.
The selling has particularly hit works by postwar and contemporary artists, they said. The Wall Street elite had favoured such works during a seven-year boom in art prices. The best performing postwar artist, Andy Warhol, saw a decline in the value of his work. A Warhol portrait of Mick Jagger sold for $1.1m in the quarter. The seller bought it in 2006 for $1.5m.
Postwar and contemporary art prices fell more than 30 per cent, according to the index, which combines New York and London prices. Such prices had enjoyed an average annual rise of 20 per cent for the past decade.
Works by Old Masters, a less fashionable genre in recent years, have declined less. A painting by J.M.W. Turner, “The Temple of Jupiter”, sold for $12.9m last quarter, a return of 10 per cent a year for the seller, who bought it in 1982 for $1.1m, said Michael Moses, a co-founder of the index.
The worst year on record for art investors was 1991, when prices dropped 41 per cent, said Mr Moses, who has collected data going back to the 1800s.
The index providers added that the art market tended to track the state of the economy but with a time lag.