Dr John Wallace looks at a new book that analyses the Irish art market from an investment perspective and offers an understanding as to how the art market works in this country.
Works of art are unique, portable, storable and their value frequently increases over time. Further-more, paintings and sculpture are often put on display, both publicly and privately. Interestingly, art works are usually bought from dealers, rather than directly from the producer, the artist.
In buying art, especially Irish art, it is important to understand just how the art market works. And this concern with financial forces does not take away from the aesthetic appreciation of the painting or the piece of sculpture.
h4. Art for art’s sake
Due to a lack of information about the art market, sellers and buyers in Ireland often exist in a trading environment where they lack important knowledge. An informative book by Clare McAndrew, sister of Wicklow GP Dr Orla McAndrew, attempts to address this imbalance. In analysing Irish art from an investment perspective, she distinguishes first between auctioneers and dealers.
Dealers tend to operate from single-owner shops. They usually own their stock and they are often informed art collectors. Importantly, the mark-up on a painting for a dealer can range from 50 per cent to 400 per cent of the price charged by the artist. In fact, the dealer can take up to 90 per cent of the retail price in commission for a picture.
The auction market, however, is different. Unlike dealers, auction houses operate within a set of very explicit rules. Also, the auction market is extremely concentrated, with just three firms achieving nearly 50 per cent of the global share of the art business.
h4. The top three
The top three international auction houses are Christie’s, Sotheby’s and Bonham’s. When a picture goes ‘under the hammer’, these auction houses will charge a premium of 10 per cent to 20 per cent to buyers, which is then added to the winning bid. They will also take a seller’s commission from the successful vendor.
Important Irish collectors on the international scene include John Magnier and his wife Susan. They collect 20th-century Irish art, international modern art and also work with an equestrian theme. They are in the top 200 list of international collectors.
h4. Gucci
Frenchman François Pinault, the owner of Christie’s auction house and also the fashion brand Gucci, is the most powerful man in the global modern art market. In April 2006, he opened his own private gallery in the Palazzo Grassi in Venice.
McAndrew goes on to give a brief overview of the development of the international art trade, which took place at a time when Europe had plenty of art and America had plenty of money. In a global context, the Irish art market is comparatively small. It accounts for less than one per cent of the international share of auction and dealer turnover.
h4. Largest auction houses
The three largest auction houses in Ireland are all based in Dublin. They include Adam’s, DeVere’s and Whyte’s. The ‘big three’ sold over 6,000 works of art in 2006, worth more than €35 million. Selling mainly Irish art, both contemporary and modern, between them they account for over 90 per cent of Irish art auction sales. Of the three, the largest is Adam’s with a market share of over 55 per cent.
In parallel with the auction houses, there are some 160 art dealers in Ireland. The breakdown in sales between auction houses and dealers is estimated to be 50:50, but some believe that dealers may account for up to 70 per cent of sales. Dealers, however, are notoriously reticent to reveal information on prices.
The Irish art market began really to pick up in 2004. Sales shot up again in 2005, increasing almost 60 per cent in value. In the Irish art market in 2005, the top price overall was paid for a Jack Yeats’ picture, ‘A Blackbird Bathing in Tir na nOg’. This was sold at DeVere’s in their November auction for €820,000.
h4. ‘High-end’ sales
One of the best years ever for Irish art was 2006. Total art sales amounted to €70 million, but €90 million might be closer to the truth. Still, Irish art is inexpensive compared with some of our international counterparts. The average price of a work of art brought to auction in Ireland in 2006 was just €5,670. However, this figure was dragged up by some ‘high-end’ sales. In reality, nearly half the total lots were sold for just €1,000 or less.
The highest-priced painting of 2006 was ‘Sick Tinker Child’ by Louis le Brocquy, sold at Adam’s for €820,000. Adam’s had the highest market share for 2006 both in terms of volume and value. Only a small amount of works brought to auction remained unsold.
Looking at the global market, Pablo Picasso and Andy Warhol are very popular at auction. Lucian Freud, grandson of Sigmund Freud, is frequently one of the top bestsellers. He had sales totalling some €28 million in 2005.
Picasso has held the top position for some five years. However, the price of an artist’s work can vary considerably. In 2005, it was still possible to pick up a Picasso sculpture for just €900, despite the high prices commanded by his other works.
h4. Louis le Brocquy
In 2006, le Brocquy took the top Irish position with the sale of ‘Sick Tinker Child’. The bid for this picture was a record price at an Irish auction for an artist who celebrated his 90th birthday the same year. Individual paintings by him have sold for over €1 million on international auction markets. In 2000, his ‘Travelling Woman with a Newspaper’ sold for €1.7 million at Sotheby’s in London.
One million euro is the surest test of an artist’s international importance and it is rare for a living artist to break it. So le Brocquy, like Lucian Freud and David Hockney, will come to symbolise art in this age. It is reasonable to suppose that le Brocquy sold work totalling over €7 million in 2006.
Sean Scully was the second–highest seller at auction in Ireland in 2006. Also among the best-selling living Irish artists at auction in 2006 were Mark O’Neill, Kenneth Webb, Basil Blackshaw, John Kingerlee, Bill Crozier, John Shinners and Donald Teskey.
h4. Supply and demand
Art prices are determined by supply and demand. However, the art market in Ireland, and internationally, cannot be explained entirely by mainstream economic theory. Rational and irrational forces are at work. Analysing the factors that make up the price of a work of art is difficult.
There is a large subjective or essentially irrational element that determines our choice of art and what we are prepared to pay for it. Factors such as a prestigious previous owner can certainly be a factor and can add an enormous emotional appeal to a painting.
However, it may be that the issues that determine the price of a painting do not really matter. As the high-profile collector Charles Sachi says, at the end of the day, ‘essentially what survives is the art’.
* The Art Economy by Claire McAndrew is published by Liffey Press.
* Dr John Wallace is medical doctor with an interest in art history.
About Gary Culliton
Loading ...
