Art Market: Is a Turning Point Approaching?
Cooperation of landscape paintings by Li Xiongcai and Guan Shan Yue, Li Xiongcai's "Deep Valley Cloud Rising Figure"
Hong Kong Chunhao Autumn Auction was heated, while a special session autumn auction in Beijing met with coldness. In yesterday afternoon's Hong Kong Chunhao autumn auction, the two-square-foot calligraphy and painting works of Lai Shaoqi exceeded 300,000 yuan in transactions, ordinary fans could also be sold for 50,000 to 60,000 yuan, buyers were buzzing: "The market shows no sign of falling"; However, in a Daoguang porcelain special session of a major bank in Beijing, many items were sold at their reserve price. Will art autumn auctions see both price and volume fall or volume fall but price rise? Is a turning point approaching?
By/Photos by reporter Lin Lin
In yesterday afternoon's Hong Kong Chunhao autumn auction, the two-square-foot calligraphy and painting works of Lai Shaoqi exceeded 300,000 yuan in transactions, ordinary fans could also be sold for 50,000 to 60,000 yuan, causing much buzz among on-site buyers: "The market shows no sign of falling"; However, in a Daoguang porcelain special session of a major bank in Beijing, many items were sold at their reserve price. An insider revealed: "Last year, items estimated at 100,000 yuan in a special session would often be bid up to at least 500,000 yuan, this year, items estimated at 100,000 yuan can be sold for a maximum of 120,000 yuan."
The Art Market is Indeed "Slimming Down"
An expert who has been exclusively "treasure hunting" overseas and bringing items back to China for cashing out told reporters that during this spring's auction, he could make an average profit of one to two times per item; however, during the autumn auction, he quickly offloaded his goods as soon as there was a 20%~30% profit margin: "In our line of work, when the market is bad, we focus on volume. The most important thing is capital turnover."
In a recent Daoguang porcelain special session held by a large auction house in Beijing, many items were sold at their estimated price. "Last year, items estimated at 100,000 yuan in a special session could often be bid up to 500,000 yuan," a buyer who participated in the live auction revealed that during the autumn auction, items estimated at 100,000 yuan were often bought at just over 120,000 yuan.
The change in prices made the overall market appear to have reduced in transaction volume. "The art market is indeed 'slimming down'," said Chen Junming, General Manager of Yintong Auctions, "but this precisely proves that the market had 'obesity'." He believes that "slimming down is about removing bubbles, very reasonable, but with the decrease in transaction volume, it will more or less affect market sentiment, and market prices may remain level with previous levels or even slightly decline."
Lingnan Calligraphy Still Has Room for Growth
However, not all sectors will experience "slimming down". Chen Junming said: "Lingnan calligraphy has never been 'obese', so where is the slimming down?" He believes that especially Gao Jianfu, the Two Sus and Two Jus have never seen skyrocketing prices, and still have a lot of room for growth. Therefore, in the upcoming Yintong autumn auction this weekend, the main focus will still be on Lingnan calligraphy. Chen Junming believes that apart from this, modern calligraphy masters have never experienced a market boom, especially the late Qing dynasty and Republican era Shanghai school calligraphy deserves attention. Market Observation
The real estate market also went through a process of decreasing volume with stable prices before experiencing both price and volume declines. Currently, the art market is experiencing decreasing volume with stable prices. Will future market prices be continuously pulled down by shrinking transaction volumes? Is the market turning point approaching now?
Newcomers May Face Opportunities to Build Positions
"This market adjustment will last 1~2 years, but the adjustment is not a reverse turning point," Zeng Boqiang said. The cycle of the art market is 2~3 years, which can be seen from the market journey of art over the past ten years: the art market started in 2004, entered a two-year adjustment period from 2005~2007, then surged, began another new adjustment period at the end of 2008, rewarmed up early in 2009, and saw a sharp rise in the market from 2010 to the first half of 2011.
"In this process, the big experts did not lose money," Zeng Boqiang said. And the spiral upward market even brought many opportunities for "quick riches": During the market adjustment period in 2008, a collector brought back a rhino horn cup from the US, priced at over 200,000 yuan but found no takers, now the market price can reach 1.2 million yuan.
"If the market shows signs of panic among experts, not only refusing to buy goods but also selling them off, that means the market has reached a turning point, but clearly there are no such signs now," Dong Guoqiang, Chairman of Beijing Kangshi, believed that for new entrants, it is still an opportunity to build positions now. Dong Guoqiang said that the stock market currently shows no reversal signs, which is good news for the autumn auction, proving that market funds are not problematic.
Reason: Selling Ordinary Collections to Turn Over Funds
"If the market falls, it will ultimately be due to an increase in the number of auction items and a decline in quality," Zeng Boqiang, General Manager of Guangzhou Cultural Relics Store, said. He gave an example, such as the Daoguang porcelain special session mentioned above, the porcelain sold at its reserve price cannot compare with last year's items in terms of quality, hence the price cannot be bid up.
Secondly, the number of auction companies has significantly increased, and many managers of some Beijing auction houses have "jumped ship" to set up their own businesses; newly established companies often dare not set too high requirements for auction items, and estimates are usually set too high because they fear no bidders will chase the price higher. On the other hand, Zeng Boqiang believes the drop in volume is due to owners being reluctant to sell: "If you need funds, you definitely sell ordinary goods to turn over funds."
"Currently, the prices of big items are still solid," Chen Junming indicated that items breaking the hundred million yuan mark continue to appear, only excessively hyped items show price adjustments.
Investment Advice
Chen Junming believes that turning points will not appear in the overall market or individual sectors, but rather in overly heated individual artists. For example, the overall market situation for the Xin'an painting school has recently cooled down, but the prices are still not low, only the prices of certain artists are excessively outrageous, thus leading to the market rejecting purchases.
Zeng Boqiang said that unlike real estate, few people buy art on loans, so there is little pressure on the capital chain; additionally, the market size is small, the total auction market turnover last year was over 60 billion yuan, and Guangzhou's quarterly total turnover was only over a billion yuan. He believes: "When real estate is stuck in a dilemma, the art market has just started."
Chen Junming suggests that newcomers should still cautiously invest, seeking reliable auction houses and reliable experts. Newcomers must thoroughly understand the circumstances of the auction house and operators before participating in bidding. Related theme articles: The Beauty of Chinese Painting Lies in the Rhythm of Life, Panda Coins Expansion Does Not Hinder Appreciation - Risks in Modern Calligraphy Appear.