With Sotheby’s Hong Kong sales suggesting the appetite for Asian art–especially Contemporary art–has returned, some financial analysts are predicting a long bull run in Asian art. They’re probably right about that. But how they think the recent correction will “drive out speculators” is any body’s guess:
Sharp property price increases in mainland China, Hong Kong and elsewhere have raised fears that bubbles are developing in those markets. The Asian modern art market, however, “still has a long way to go,” Ms. Lin said. “There is no bubble. Prices are still low, compared to what some Western contemporary artists’ works can command.”
Analysts at Nomura echoed that assessment in a research note last week.
“In terms of scale, China still has a long way to go to touch the Japanese exuberance of the 1980s,” they wrote. “Total sales between 2000 and 2009 for Chinese arts amount to a little over $4 billion. This is in stark contrast to Japan, which experienced a massive investment of around $19 billion on art in just three years between 1987 and 1990.”
“As China enters the sweet spot of economic growth and more and more wealth is created, the art market should maintain its momentum,” they continued. “We believe that the recent correction could actually drive out the speculators and make the market more widely accessible.”
Asian Art Auction Sets Records for Artists (New York Times)