This analysis of the October 2018 Frieze Contemporary Sales in London is available to AMMpro subscribers. Monthly subscriptions begin with the first month free. Feel free to subscribe and cancel before you are billed.
The top line news from the Frieze Auctions is that the 12% drop in overall sales volume from 2017 to 2018 could have easily been made up had the consignors of two works—a Jeff Koons Celebration-series cracked egg and a Richter scull painting—chosen to accept the bids offered in the room instead of holding fast to their reserve prices. That observation both brings into focus the growing issue of seller expectations and estimates in the Contemporary art category and the slowly changing composition of the Contemporary art market.
As you will see later in our charts of the market share by artist during the Frieze auctions, there is a meaningful transition taking place in the Contemporary art market. Before we get there, let’s acknowledge that the 2018 Frieze sales were stronger in the total sales volume, as mentioned above, and the overall average price of sold works. Otherwise, there was an improvement in 2018 of the sell-through rate and hammer ratio. The hammer ratio measures the value of the aggregate hammer price over the aggregate low estimate. A higher hammer ratio is an indicator of strong bidding and a rising market. A lower hammer ratio indicates a market where buyers are either picky or willing to wait to get their price. In 2017, the overall hammer ratio for the Frieze sales was .81; 2018 saw that number rise to .94. That’s better but still a sign that buyers are not feeling much pressure to pull the trigger.
The higher sell-through rate from 2017 to 2018 suggests the auction houses are working to better match buyer and seller expectations. That might explain the lower average prices. Along the same lines, a full 40% of the sold lots sold above the high estimate on a hammer basis. The bulk of those sales were in the lower value day sale lots. So we can see, once again, that the energy in the Contemporary art market is more vibrant in the lower reaches. Bidders are willing to pursue lower value works they believe will become more valuable over time over works that are already considered quite valuable.
Obviously, there are dramatic exceptions to this. Jenny Saville‘s Propped (above) selling for £9.5m or more than twice the high estimate of £4m.
Obviously, there are dramatic exceptions to this. Jenny Saville‘s Propped (above) selling for £9.5m or more than twice the high estimate of £4m. Nonetheless, you can see from the two charts below that majority of lots bid over the high estimate are day sale lots.
Note the hammer ratio in the Day sale. It’s 1.16 compared to the .91 of the Evening sale. The far greater value in the Evening sale prevents the strong day sale performance from having much effect on the overall numbers. As is normal, the day sales are less influenced by the top lots, the top ten works are only 14% of the day sale total, than they are a thermometer of the overall market. The Evening sale average prices are more than twelve times the day sale average. Once again, the day sale average value is an ‘affordable’ £102k
Much of that is a product of the mix of artists and their market share. In 2017, the the most amount of money was spent on the work of Jean-Michel Basquiat, Lucio Fontana, Peter Doig, Francis Bacon and Andy Warhol. This year Basquiat and Warhol fell dramatically down the list. They were replaced with Jenny Saville and Georg Baselitz. Albert Oehlen also climbed the market share charts. And Sigmar Polke made a dramatic showing.
The top artists also held a consistently lower share over the overall market spend underlining the fact that the market is seeking out a greater number of artists to acquire. We’ll have another post to look at the dynamics of several of these artists like Fontana, Sam Francis and Günther Förg. It’s worth noting that the market share for Jenny Saville and Francis Bacon, two very different artists, primarily rests upon the sale of one work. Also worth noting is the strong showing for George Condo’s work in London as well as the work of Sam Francis.
Not all strong performances register in the market share numbers. One good example is Kai Althoff whose work performed well as a dynamic lot with deep and aggressive bidding in both the day and evening sales. That’s a rare feat. Aggressive bidding was spread across the price spectrum with lots in the low five figures sitting alongside seven-figure lots with similar hammer ratios. Albert Oehlen’s work, Andrian Ghenie’s and Jenny Saville are the notable examples. Howard Hodgkin’s paintings continue to attract strong bidding as did the work of Elizabeth Peyton, Georg Baselitz, Daniel Richter and KAWS.
The day sale dynamics were no different. There four-, five- and six-figure lots all attracted bidders. There were respected names like Walid Raad whose work does not appear much on the secondary market alongside works by George Condo, Harold Ancart and Gunther Forg.Switching to the top lots in both the Evening and Day sales, we can see the effect of estimates. Note the number of lots sold at compromise prices. Worth noting in the day sale chart is the relatively small number of works among the top lots that were bid above the estimate range. The Evening sale is balanced between dynamic lots and compromise sales. The Day sale is top-loaded with works that sold within expectations.