Contemporary art is becoming the gold of the new rich. This week’s strong auction sales in New York brought record bids for Rothko, Klein, Lichtenstein and several other post-war artists. Scarcity is part of the allure, along with taste and the spending power of the global plutocracy. One thing to please at least the financiers among them is that contemporary art has inked good returns, too.
Mark Rothko’s ‘Orange, Red, Yellow’ fetched nearly $87 million at Christie’s, topping the bill at the auctioneer’s $388 million sale, its biggest ever. That’s a sign that the Contemporary category — albeit increasingly not an accurate description — has the upper hand these days, even if the all-time record, set by Sotheby’s with Edvard Munch’s “The Scream” last week, was officially in the firm’s Impressionist and Modern sale.
That’s further underlined by the trajectory of prices. Artnet’s Contemporary 50 index is up more than five-fold since 2001, against a mere 60 per cent gain for the Impressionist 25 benchmark — and that’s before this week’s sales. Contemporary art dipped in 2009 with the global financial crisis, but recovered by 2011.
Like, say, high-end London property, expensive art is now a global market — it’s not like the end of the 1980s when Japanese buyers, who dominated auctions for Impressionist works, suddenly disappeared. If European collectors are cautious — as might be expected with financial tremors still rumbling around the region — there are plenty of US, middle-eastern, South American, Russian and Asian buyers to take their place.
And, the super-rich aren’t short of cash. In fact, some of them have the luxury of not knowing what to do with it all. The financially-minded may not admit it, but they like the idea of art that can hang on the wall (even, or especially, at the office) or stand in the courtyard for a few years and then be sold at a profit. With a few exceptions, the records set this week were largely for works by famous deceased artists with a tried and tested market — not by risky relative newcomers.
Contemporary art values have trashed the lacklustre S&P 500 since 2001, easily beaten another favourite of the one per cent, fine wine (up 209 per cent, according to Artnet’s records), and even almost matched a huge run-up in the price of gold itself. Given that many other status symbols depreciate rapidly, that makes shelling out tens of millions for a Rothko seem almost prudent.
