The analysis of the Spring 2021 Hong Kong auctions at Christie's, Sotheby's and Phillips is available to AMMpro subscribers. (The first month of AMMpro is free and subscribers are welcome to sign up for the first month and cancel before they are billed.)

Despite experiencing a dip of around 20 percent in annual sales in the last year due to the pandemic, the top auction houses—Christie’s, Sotheby’s and Phillips—have now bounced back from the crisis to pre-pandemic levels. In the past several months, auction house executives have emphasized that a boost from clients based in Asia has fueled the market’s return to strength. In December 2020, Hong Kong unexpectedly outpaced New York and London by a meaningful margin. The shift demonstrated an important change in the dynamic between global sale centers. Asian purchasing power has only continued to show strength into the most recent Spring and Summer auction season.

According to a recent report published by London art market data firm, Pi-eX, auction sales taking place in China increased to $1.2 billion this year in the second quarter, up 69% from the $734 million total generated before the pandemic during the same period in 2019. In terms of market share, Asia’s growth also surpassed U.S. which has been the traditional leader. North American sales in 2021 failed to bounce back to 2019 levels. The U.S. instead saw a 16 percent drop in sales.

In a recent report on its results from the first half of 2021, Christie’s saw bidding from Asia reach a historic high of 39 percent across the fine art and luxury categories. A focus on Asia also brought success to Phillips. According tot the Pi-eX report, the smallest of the three global auction houses saw the highest increase in sales from the second quarter of 2019 to 2020. The rise was 34%. Some of the increase can be attributed to the houses’s collaboration for their modern and contemporary art evening sales with Chinese auction house Poly. This Spring, Phillips made $122 million across four consecutive white glove sales in one week. That result was a 121% increase over the previous year and the highest seasonal total for the house in Asia.

Likewise, Sotheby’s performance in Asia proved a bright spot, with sales run from its Hong Kong hub reaching $932 million—20 percent of Sotheby’s total global sales—last year.

The collective total for the Hong Kong sales was HKD 4.2 billion ($546 million). This includes day and evening sales in the modern and contemporary art category at all three houses. The evening sales grossed HKD 3.4 billion ($436 million) across 157 sold lots. With 159 lots offered, the sell-through rate was a near-perfect 99 percent. The statistic bears out auction specialists’ view that buyers in the region are as hungry as ever for modernist masters and rising stars with primary market supply constraints.

In the evening sales, the overall hammer price of HKD 2.8 billion ($365 million) was solidly above the HKD 2.2 billion ($280 million) aggregate low estimate. The result marks a hammer ratio, a rough measure of the overall market demand, of 1.31. (Typically, an overall hammer ratio over 1.10, indicates a relatively strong demand.) Below 1.00 the hammer ratio signals market weakness. The figure indicates a lower depth of bidding than seen in the fall, which realized a hammer ratio of 1.44. The change suggests that demand among top buyers saw a slight decline between seasons.

Like the New York modern and contemporary art sales held between March and May, the top ten lots of the Hong Kong evening sales accounted for less than half, hovering around 40 percent of the total premium sale total between the three houses. The results it is an indicator of value being concentrated in a few works. Even with the strong results for individual works by Basquiat and Picasso, the 41% figure suggests a broad market.

The modern and contemporary day and mid-season sales brought in HKD 855.7 million ($110 million) across 647 lots sold, with another high sell-through rate of 94%. The day and mid-season sales realized a hammer total of HKD 685 million (88 million), against a pre-sale low estimate of HKD 396 million ($51 million). That’s a hammer ratio of 1.73, which surpassed the fall season’s result of 1.69. The rise signals a continuing bullishness in the day sale market. An additional measure of the health of the Hong Kong day-sale market is a consistently low percentage out of the works offered that went unsold (6.33 percent). That result is two percent lower than the fall season’s unsold percentage.

A closer look at the figures shows that the number of unsold works in the day sales were on par with works that sold for prices below the low estimate. This is a shift from the results seen in the Fall Hong Kong sales—when the number of unsold lots exceeded the number of those that failed to meet their expectations. In the Fall, that dynamic was an indication that consignors were less willing to compromise on their expected price— opting to hold onto their art until the following season, rather than sell it at a lower value. This Spring season, however, signals that sellers exhibited higher confidence in prices reflecting the return.

Yoshitomo Nara, Sanyu, Basquiat Lead by Market Share

In past seasons, several of the highest hammer prices were achieved by French-Chinese abstract painters Zao Wou Ki and Sanyu, who have long held the top spots for market share in Hong Kong. This yearJapanese contemporary artist Yoshitomo Nara dethroned them. Though both painters remained among the top 7 artists by market share. Nara’s total turnover in these sales was HKD $391.7 million ($50.3 million). Sanyu came in second with HKD 282 million ($37.2 million).

Market share can be a tricky measure. As illustrated in the graph above, some artists sell a few very valuable paintings; others have numerous sales at a lower price point. Contrast the average price of 30 lots by Nara that sold with Sanyu’s average price. For Nara,, the average price was HKD 13 million ($1.7 million). Sanyu’s, on the other hand, was three times higher at HKD 40.8 million ($5.2 million) across just 7 sold lots. The chart shows Jean-Michel Basquiat, Zhang Daqian, Clyfford Still and Liu Ye as artists with higher overall average values from fewer sales.

Unexpectedly, both Jean Michel Basquiat and Pablo Picasso were among the artists leading by market share this season. This closely resembles the results in the New York, London and Paris auctions staged in the late Winter and early Spring. Basquiat was the third highest grossing artist in the Spring to Summer Hong Kong sales, bringing in HKD 243 million ($31.2 million) from 2 lots. American postwar artists Clyfford Still and Willem de Kooning was the only artists to make it in the 20 highest grossing names with the sale of a single lot. For Still, it was an abstract canvas from his late Maryland period. It came to market after decades in private hands with Colorado collector J. Landis Martin and sold for $16 million at Sotheby’s. Overall, the artists that saw the highest number of works traded across the sales were Yoshitomo Nara, Zao Wou Ki, Yayoi Kusama and Bansky.

Western Artists Rise

A closer look at the market share figures shows that value has balanced out between modern and contemporary artists. Notably, Picasso, Sanyu and Zao Wou Ki had market shares ranging between 4 to 7 percent; for the latter two Asian masters, that marks a drop from last season’s overall market share percentages around 9-18 percent. This season saw Basquiat’s market share multiply four times since the fall season. Bluechip American artists like Clyfford Still and Roy Lichtenstein have long been coveted in the New York sales. In Hong Kong this spring, both artists posted significant market share. In the fall, neither artist was among the top 30 artists by share.

Emerging Artists Spur Highest Demand

Among the works with the most competitive bidding were by artists like Emily Mae Smith, Loie Hollowell and Salman Toor. These cutting-edge artists have each seen their prices escalate at auction houses. Women artists and artists of color— groups that have long been under-presented in evening sale offerings∏—are a focal point of interest among buyers and specialists. Known for her paintings of anthropomorphic brooms that riff on art historical references, Emily Mae Smith had two works among the most dynamic lots of the evening sales. Broom Life (2014), which depicts Smith’s animated broom lounging on top of a melting ice cube, achieved an exceptionally high hammer ratio of 25. Among the other artists with the highest hammer ratios in the evening sales were Matthew Wong, Joel Mesler and Jadé Fadojutimi.

In the day sales, Japanese painter Asuka Ogawa, whose starkly painted images of children debuted at Blum and Poe in a solo exhibition last Spring, saw the highest demand among bidders. Historically, Phillips has fueled prices for young artists by debuting them at auction. The house achieved new records this June for Salman Toor, Emily Mae Smith, Jadé Fadojutimi, Loie Hollowell and Ayako Rokkaku. Phillips’s collaboration with Poly Auction in Mainland China would seem to have helped drive this bidding.

On the heels of a major retrospective that opened in April at LACMA, Yoshitomo Nara’s Missing in Action (2000) fetched HKD 123.7 million ($15.9 million). A closer look at the evening lots that sold within their estimates shows two stories. On one side, there is stable demand for works long held privately by 20th century artists with deep markets and institutional presence. On the other side, works by prolific living contemporary artists like Nara and Richter— artists who have established themselves over the course of several decades and together fulfill the equal demand in Asia for abstraction and figuration—are maintaining a strong foothold with top buyers.

The chart of the day sale lot performance, below, shows George Condo’s Multicolored Portrait (2014), a fractured figurative painting inspired by Picasso’s cubist portraits, was the top selling work in the period. Elsewhere, Asian artists such as Liu Ye, Yayoi Kusama and Zao Wou Ki who have long been reliable staples in the Hong Kong sales were among the highest sellers. Unlike in New York, the day sale auctions in Hong Kong are still dominated in volume and price by Chinese modern painting like Zao and Chu Teh Chun. Sales of Chinese works of art and classical paintings are primarily led by Asian collectors.

From high sell-through rates to the rise of Basquiat and Picasso’s share in Asia’s sale, the strong results show that the region is now the key driving force for the auction industry post-pandemic. In a recent interview with Bloomberg Markets, Christie’s CEO Guillaume Cerutti said that auction houses faced an imbalance between buyers and sellers, because “there was very strong demand, but the supply was more challenging.” Yet, Cerutti said that the biggest boost seen in the second half of the year was an increase in buying and bidding coming from pan-Asian countries. Now, the Cerutti emphasized, a balance in the market between supply and demand has returned.