The Art Market in the Time of Covid-19

The horrendous loss of life over the last few months has rightly led to the serious, unarguable governmental rhetoric of lockdown and social distancing in countries all around the world. The Global economy will be sorely hurt but nothing ever lasts forever and though changes in the way we work are afoot, it will be equally interesting to see what stays the same. The art world is in the midst of a strange and unstoppable (excuse the oxymoron) inertia that is causing a right old panic amongst the trade and the auction houses. These are, indeed, extraordinary times and, as we all know, they may be around for a while.

Yet, despite warnings of the collapse of the art market as we know it, I am going to put across a few pointers as to why I believe that this will not be an interminably long struggle of collapsing prices and disheartening online exhibitions. 

We have never in the history of the world seen a programme of government spending to prop up an entire global economy. There are numerous ramifications in the mid-term for the eight trillion US Dollars of public spending being mooted but in the short term it will keep economies afloat and should, hopefully, rescue us from depression.

In the long term it will lead to inflation – or so we are told – as governments try to inflate their way out of huge debts. One way to exacerbate inflationary problems is to hold cash, one way to override it is to hold tangible assets: stocks, real estate, gold, jewellery and, of course, art.

And yet the best art to hold is always going to be up for enquiry: is it a post-war master such as Nicholas de Stael? Is it a classic Brueghel the elder? Or perhaps a great Impressionist? Picasso seems a good bet, surely? Provided quality is outstanding all of the above should work as a holder of funds. There is no question, as history shows, that a great painting will always remain a valuable painting no matter what the fashion of the time. I would only advise that collectors steer away from the cartoon-decorative contemporary art of the last few years. Shallow, effervescent, ‘see it and move on’ works of art that have flooded the market in recent times should be approached with great caution in times of volatility.

As to the short term there is going to be the usual discussion about online sales and online auctions but frankly, over the longer cycle, I doubt that this is going to be a trend for the future. The idea of gauging a work of art by seeing it on a screen is, in my view, flawed and as such there will be a period of time where pieces will be transported to prospective clients for a physical viewing. This will, perhaps, be avoided where possible but it may well be part of the selling climate. The administration of such copious art-transits will involve complexities and costs for the types of galleries that can no longer take part in Art Fairs but that, right there, will be the cost equation.

Appointment-only previews in auction house galleries may well become mandatory but the bidding need not, necessarily, take place physically. This might have a cursory effect on final prices, but it need not mean that the auction houses cannot have decent sales. The role of the advisor will come into its own as we would be willing to travel at the behest of the client as a service – taking into account the myriad health checks and appointment-based previews. However, in my experience buying at auction is a huge amount of fun for collectors and to replace that with an online portal reduces the drama of the event. Also, the pressure of the room can lead (advisor-less) buyers to bid well over their budget: to the gain of the house. In my view the auction houses will be champing at the bit to get clients back to the room and executing physical paddle bids.

Art fairs look to be deeply culled in 2020 (no Masterpiece, no Frieze, no Art Basel except on online) and those that take place will be hugely dependent on social distancing restrictions being raised in the medium term. However, going forward, many may still be able to operate if the policing is correct and the clients/advisors invited are willing to operate to a schedule. There may not be the ‘VIP’ preview masses of usual years but that might be to the benefit of the selling galleries who often complain of being spread too thin on a busy opening preview at one of the major fairs. Indeed, fewer visitors often makes the experience of visiting a fair a far more enjoyable one for the genuine buyers. As with auction previews, advisors will have much to do: we will be the eyes and ears for those clients unwilling or unable to visit. These are turbulent times but after Covid-19 life will go on – differently, but no less well.

Our hearts go out to all those that have been affected by Covid-19 and a huge thank you to all the health-workers and key-workers around the world, including NHS workers here in the UK, for going about their work with such a sense of duty and commitment.

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