Is London the new center of the Contemporary Art trade?

Two important themes of the last 18 months in the art market have been the continuing strength of Contemporary art and the growth of London as the fulcrum of the new art-market dynamic. The chart above shows the ever-increasing cycle of London sales of Contemporary art. First, it was simply Christie’s and Sotheby’s, now Phillips is adding important totals. But these impressive numbers are not the only story. (More charts after the jump.)

June over June growth accelerated in 2007. February 2008 established a new base level for the growth cycle that may be difficult to maintain.

The total number of lots sold peaked in June of 2007.

Average prices are rising across the entire sales category but fluctuating during the Evening sales. The Blue line represents the average lot value of the evening sale lots across all three houses. The green line represents the average lot value for all of the lots in the sale. February’s massive rise in the average price for a work in the evening sale may be a harbinger of next week’s success.

However, sell-through rates are falling steadily. The market is not absorbing everything that is offered.

The rapid rise in one key statistic does suggest some potential weakness in the London Contemporary auction market. The top ten lots in each evening sale have accounted for a smaller percentage of the overall total over the last three years. These numbers reflect greater strength and pricing power in a broader base of the market. But the huge jump in February, almost to 60%, suggests a market too reliant a few key sales.

Further analysis to follow.