Capital gains and losses in the Contemporary art field

[17.08.2021]

The Contemporary art market has posted a spectacular recovery with sky-high results worldwide and an unprecedented demand dynamic. But before presenting our analyses of the key figures and major trends in our upcoming Contemporary Art Market Annual Report (scheduled for publication in early October 2021), Artprice has looked at a number of resales that reveal some of the price variations within the current market and therefore provide an exciting indication with regard to future trends.

In general, a collector’s primary motivation for buying is the desire to possess a particular work by a particular artist at a particular time. Certain signatures obviously attract this desire more than others, especially those for which international demand is currently at a peak. Jean-Michel Basquiat is the most obvious example, but there is also extraordinary demand for works by Yoshitomo Nara, Ayako Rokkaku, Banksy and George Condo whose works are frequently at the top end of our ranking of ‘strongest resales’ since the summer of 2020. For these artists, with a fairly long holding period of roughly 10 to 30 years before being reconsigned for auction, the return on investment is a staggering 20% to 30% per annum (depending on the artists).

Within a just few years of ownership, the value accretion can be eye-watering. In the most extreme case on the Contemporary Art market – that of Basquiat – the price of his canvas In This Case (1983) added $92.1 million in just under 20 years, i.e. +9,000%!

Top 10 capital gains recorded in the Contemporary Art segment (2020/21)

Rank Artist Hammer Price ($) Artwork Sale
1 Jean-Michel BASQUIAT 1 230 000 $ (vs 4 840$ 29 years ago) Untitled Christie’s New York
2 LIU Ye 1 131 190 $ (vs 4 462$ 26 years ago) Yellow and blue for M Christie’s New York
3 Barkley L. HENDRICKS 44 100 $ (vs 453$ 10 years ago) Magnolia #4 Poly Auction Hong Kong
4 Jean-Michel BASQUIAT 93 105 000 $ (vs 999 500$ 19 years ago) In This Case Sotheby’s New York
5 BANKSY 978 387 $ (vs 16 660$ 14 years ago) Weston Super Mare Christie’s New York
6 Barkley L. HENDRICKS 2 803 000 $ (vs 48 000$ 10 years ago) Jackie Sha-La-La
Bonhams Londres
7 Jean-Michel BASQUIAT 400 000 $ (vs 6 900$ 26 years ago) Untitled Sotheby’s New York
8 Jean-Michel BASQUIAT 4 590 000 $ (vs 82 280$ 27 years ago) MP Christie’s New York
9 Jose John SANTOS III 203 643 $ (vs 4 009$ 15 years ago) The Game Christie’s New York
10 Jean-Michel BASQUIAT 1 865 500 $ (vs 45 369$ 21 years ago) Plush Safe He Think Leon Gallery Makati
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Large profits in the short-term

Remarkable gains are not however only hammered at the high end. One of the most striking examples of the year concerns the 39-year-old Irish artist Genieve FIGGIS, supported by the Almine Rech Gallery. The value of her painting Ladies in the Grass (2015) grew +1,190% in just one year! Acquired for $18,750 in summer 2019 in New York, it fetched $242,000 the following summer in Hong Kong. Discovered on Instagram and supported by a major gallery at a time of renewed attention and a substantial surge in demand for ‘Bad Painting’, Genieve Figgis illustrates the current craze for figurative painting with ‘strong personality’.

Another substantial value leap was hammered for a work by Mickalene THOMAS and it highlights yet another major trend in the Contemporary market. Thomas is famous for developing a new vision of the African-American woman through the lense of traditional art history (Courbet, Manet, Picasso, Matisse and many others). According to Tina Campt in her book published this year, A Black Gaze. Artists Changing How We See, Thomas is one of those artists participating in what she calls a “Black artistic Renaissance”. This renaissance has been reshaping public and private collections for several years now and has generated immense enthusiasm on the Art Market. In just two years, the price of Mickalene Thomas’s canvas Untitled #10 (2014) rose from $131,250 (November 2019) to $889,100 (March 2020, Phillips New York).

Demand for works by the Chinese artist LIU Ye is also rocketing. Highly sought after by international collectors, especially since he joined the international gallery David Zwirner (2019), about thirty of his paintings have fetched 7-digit auction results since the collaboration was announced. On June 4, in Beijing, the artist crossed the $10 million threshold with a work entitled (Bamboo bamboo broadway, $12.6 million, Poly International). His painting The Window – a canvas acquired for $85,700 at Beijing ChengXuan Auctions in June 2018 (before he teamed up with Zwirner) – was resold for $646,000 in April 2021 (at Sotheby’s Hong Kong), adding $560,000 in three years.

Although they tell us a lot about the market’s current appetite, such capital gains are of course rare. And while the work of some artists has enjoyed intense enthusiasm, other artists – some very famous – have seen sharp drops in the values of their works.

Capital losses

The work of some artists has become substantially more ‘volatile’ than others, either because it acquired too much value too quickly or because it is associated with a particular trend or medium that has temporarily lost its fizz. The market for contemporary photography, for example, seems to have been particularly quiet of late with photos by Andres SERRANO, Hiroshi SUGIMOTO and Andreas GURSKY all posting disappointing results.

We have also seen (somewhat predictably) a clear disaffection for certain young American Abstract artists whose prices had soared too quickly and too high a few years ago. Lucien SMITH and Dan COLEN are the prime examples. After a relatively short period of overheating, their prices hit a critical threshold and then began to shrink. In 2016 already, their values contracted as quickly as they had soared. These episodes are bad news for the careers of young artists who do not yet have sufficiently powerful and committed galleries behind them. Lucien SMITH (1989-) is still suffering the after-effects: the price of his canvas A Simple Twist of Fate 6 (2012) lost over half of its value between February 2017 and December 2019 (from $30,000 to $13,940). Likewise (but even worse) for Dan COLEN whose Oy Vey (3) (2010) dropped from $164,500 in 2013 to just $23,750 in 2020 (Phillips).

An artist as essential as Damien HIRST (1965) can also disappoint. In 2015 one of his major ‘Spin paintings’ was acquired for no less than $855,000 (within its estimated range) at a Christie’s sale in London. However during Sotheby’s London-based online sale in November 2020, the same work sold for just $370,000. That’s a shortfall of almost half a million dollars! Beautiful Mis-shapen purity clashing excitedly outwards painting (1995) is nevertheless a great work from an essential phase in Damien Hirst’s career. His Spin paintings were machine-made with the colors being distributed over the support by a motorised centrifugal force. Christie’s optimism in 2015 paid off and it took full advantage of media attention surrounding Damien Hirst’s new gallery in South London (Newport Street Gallery), an impressive space combining three Victorian buildings with a total surface area of 3,400 m2. Today, the market is more sober, but does not appear to be questioning the importance of Hirst’s œuvre in Contemporary creation. The main problem with Hirst’s market is over-abundance; the auction market is awash with his paintings (nearly 200 have been offered at auction in the past 12 months), so the rarity factor (not to mention the ‘originality’ factor) has suffered a little.