As
the world’s leading auction houses prepared for their big-ticket
contemporary sales in London this week, the question was on everybody’s
mind: What will the shock and confusion following Britain’s vote to leave the European Union — not to mention the plunging world financial markets — mean for the art market?
Until
now London has been regarded as the capital of the European art market.
With many in its commercial art world supporting the position that
Britain should remain in the European Union, a pall has unmistakably
been cast over the proceedings. Some lots may be withdrawn this week at
the last minute by nervous consignors, because uncertainty is not good
for any market — including art.
Several
experts predicted that fewer pieces would come to market in Britain in
the near future because of the fall in the value of the pound.
“No
one is going to be selling much in the U.K. now because sterling is so
low,” said J. Tomilson Hill, an executive at the Blackstone Group and
longtime collector of Renaissance and postwar art. “So the supply is
going to dry up — particularly in the Old Masters market.”
But
people in the art world maintained that previous convulsions, like the
collapse of Lehman Brothers and terrorist attacks, had proven that art
can persevere as an asset class, even in hard times.
“When financial markets are in turmoil, the art market offers a safe harbor,” said Christophe Van de Weghe,
a Madison Avenue dealer. “The roiling of the currency markets will have
a similar effect. Generally, the artworks that would have done well
without Brexit will do well despite it.”
And
some dealers are downright bullish on Britain’s decision to leave the
European Union, pointing out opportunities for global art buyers. Guy
Stair Sainty, director of the Stair Sainty gallery in London, noted that
“art prices set in pounds will effectively have fallen for foreign
buyers.”
Brett
Gorvy, Christie’s worldwide chairman of postwar and contemporary art,
also sounded an expected note of optimism. “People come into the market
because they want to go with hard assets,” he said, “things they can
trust more.”
And
Edward Dolman, the chairman and chief executive of Phillips, said the
weakness of the pound should lure “Asian and American buyers in
particular.”
So
far, the auction houses seem to be pressing ahead as planned, with
their contemporary evening sales — featuring a Rudolf Stingel, estimated
at $1.4 million to $1.8 million at Phillips on Monday; a Sigmar Polke
at Sotheby’s, estimated at $5 million to $6.5 million, on Tuesday; and a
Gerhard Richter, estimated at about $14 million, at Christie’s on
Wednesday.
Christie’s
is holding a special sale to celebrate its 250th anniversary —
“Defining British Art” — on Thursday night, at which Francis Bacon’s
“Version No. 2 of Lying Figure With Hypodermic Syringe” (1968) is
estimated at about $20 million and Lucian Freud’s “Ib and Her Husband” (1992) at about $18 million.
Art
world experts say that while the referendum passed, the changes will
not be immediate, and the uncertainty raised by Brexit merely cements an
aura of caution that had muted the art market during predictions of a
softening.
“While
the pound might be more attractive to foreign buyers and less to U.K.
buyers,” said the dealer Dominique Lévy, “it creates a climate of
concern.”
“It
insulates England and this cannot be good for any creative energy,” she
added. “But, at the end of the day, it is more about the quality of the
works offered next week and the appetite after the May sales and
Basel.”
In
2015, Britain captured 19 percent of the total value of global auction
sales of art and antiques, according to the TEFAF Art Market Report,
published in March. This was by far the largest share among European
countries, with France the next highest at 5 percent.
One
of the many questions posed by the Brexit vote is how Britain’s auction
houses will be affected in the long term by renegotiated trade
arrangements with the European Union. Will lots temporarily imported
from the European Union be subject to duties or taxes that might deter
sellers and buyers?
At the moment, artworks sourced outside the European Union can be subject to so-called “import VAT” (value-added tax) of as much as 20 percent on the hammer price.
Sotheby’s, in a statement, said that it would “continue to thrive in and adapt to whatever environment Brexit brings.”
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