Bloomberg has a curious report based on a conversation with Daniel Komala, co-Founder of Larasati Auctioneers, the Jakarti-based auction house that holds sales in Singapore. Komala predicts a 40% price decline this year, which is interesting because his market is one of the few that exhibited strength in the Fall. Although, his own sale struggled a bit. But the curious part is the way Komala invokes “speculators.”
A running theme here at AMM is that “speculators” are the bogeymen of the art market. Everyone talks about speculators but few have seen them. And no one will define themselves as a speculator.
Our opinion is that rapid market rises come from an influx of new buyers. Since these buyers are late to the party, they have to pay a premium to acquire work that is in demand. Speculators usually buy low and sell high. So defining these buyers who acquire at the top of the market as speculators has the formula the wrong way around. These buyers are not going to sell to anyone. They’re going to own the art for a long time–or sell it at a loss.
If you own an auction house, the buyer willing to pay a premium is a valuable client. Now, it would seem, Komala wants to distance himself from that kind of client:
“Now the game is back to the more experienced buyers,” said Komala at a media lunch in Singapore today. “You will see less speculators in the market — this is the survival of the fittest.” [ . . . ]
Komala said prices will tumble 30-40 percent this year, partly because auction houses concentrated on promoting a small number of contemporary artists, whose prices became inflated.
“At the end of the day, you got sick of seeing the same thing again and again,” Komala said. “Even a beautiful girl, if you see her everywhere, all the time, she looks ordinary.”
Komala said collectors would continue to buy good works, while lower quality paintings, especially by artists who “mass produced,” will struggle to find buyers.
“At this moment in time, it will be hard to sell rubbish and the pressure is on the living artists” he said. “There are still people out there looking for good works and willing to pay a fair price.”
Art Auction Prices May Fall 40% in 2009, Larasati Chief Says (Bloomberg)
