The art economy is in freefall - and it's mostly China's fault
The global art market has fallen 7% compared to last year. And like everything else to do with the worldwide economic slowdown, most people are blaming it on China.
A report by the European Fine Art Fair (TEFAF) shows that global art sales fell from "$68.2 billion (£47.7 billion) to $63.8 billion (£44.6 billion) and the volume of sales declined by 2% to 38.1 million."
While sales actually increased 4% in the US, Chinese demand tumbled, with total sales dropping 23% to $11.8 billion (£8.2 billion). The UK also saw a 9% drop in sales, but it still jumped ahead of China to become the world's second biggest art market after the US.
Though an overall 7% year on year drop would be bad news for any global market, some see the Chinese drop in demand as a momentary blip. Edward Wilkinson, executive director of Bonhams' Asia, told the Guardian that the Eastern markets would always pick up as its collectors still appreciated new works:
"The market in Asia has experienced tremendous growth over the past couple of years and some sectors may experience a temporary slowdown. However, collectors from the Asian region have shown their capacity to appreciate a broad cross-section of the arts and I believe the market has the capacity to adapt very quickly."
Nevertheless, the TEFAF report notes a striking divergence in the effect price has on an artwork's fortunes: the market for art valued at over $1 million (£700,000) has grown four times faster than the general market, while the $10 million (£7 million) plus art market has grown 10 times faster.
Modern art also did slightly better than classical art, with Picasso and Modigliani pieces selling for $170 million (£119 million) last year.
So if you want invest in art, there's one easy rule to follow: buy modern works that cost over $10 million (£7 million).