The art market and the double-dip
September 13 2011
Image: Google Finance. Graph: Sotheby's share price over the last 6 months.
The Art Newspaper has an interesting piece on how the art market might fare if the impending 'double-dip' recession is a bad 'un. TAN also relates that Sotheby's has cut back investment in Europe in favour of expansion in... you guessed it - China.
Fears are growing about the potential impact of this summer’s renewed global economic turmoil on the art market. The 2008 financial crisis sharply hit art sales across all sectors, but the market bounced back quicker than many others, particularly for blue-chip works. At issue now are two diverging premises: that art is a luxury brand, as sensitive to stock markets as high-end fashion and first-class flights (this is the view of those looking at the art market from the outside); or that it represents a safe investment, sought after in troubled times much like gold and the Swiss franc (the view of those with more vested interests).
The evidence from my little piece of the art market is that a double-dip won't severely disrupt things. If most people have survived the last three years reasonably well, then you'd presume they are good enough at their business to see out another downturn. It's the triple-dip I'm worried about...
