Christie’s London 20th Century and Surrealist Evening Sales: lower supply, higher upside
Posted by Pi-eX Research on 1st Apr 2021
Christie's multi-category 20th Century and surrealist evening sales opened the 2021 series of major auctions with bright expectations. With 168 million GBP of art being traded (including buyer's premium) in the high profile London sales (120 million GBP for the "20th Century Evening Sale" and 48 million GBP for the "Art of the Surreal" evening sale), the auction house showed that collectors around the world have not lost their appetite for fine art.
Christie's team surely found the right alchemy-mix for two successful sales, which obtained together a remarkably low Bought-in rate (less than 10%) and an enthusiastic level of bidding.
Pi-eX Research looked into the ingredients that helped foster the success of the Christie's London Marquee auctions.
1. A reduced offering: lower supply makes for a smaller auction both in volume and in value
In a recent interview, Christie's CEO, Guillaume Cerutti, said that one of the greatest challenges in 2020 for the auction house was to find supply, i.e. artworks for consignment at auction. The effect of this issue can still be seen in the total number of lots catalogued ahead of the London Spring Marquee evening auctions:
With only 82 lots catalogued, this year's Christie's 20th Century and Surrealist evening auctions counted the second lowest number of lots compared to historical Impressionist, Surrealist, and Contemporary evening auctions arranged in the Spring in London, far from the top offering of 2007 (214 lots catalogued) but not as bad as the lowest offering in 2009 (78 lots catalogued).
In 2020, the London Spring Marquee sales took place beginning of February, a month before the start of the Covid19 pandemic in Europe. It was therefore little surprising to see an 11% decrease in the total Low Estimates ahead of the 2021 spring sales from 116 million GBP in 2020 to 103 million GBP in 2021.
2. Higher obtained average prices resulted in an impression of stability
The total Hammer Price obtained at the 2021 Christie's 20th Century and Surrealist evening auctions was comparable to the total Hammer Price obtained in equivalent sales in 2020, even slightly better at 141 million GBP versus 137 million GBP in 2020.
Given the lower number of lots offered for sale in the 2021 auctions, the increase in the total Hammer Price was made possible by a strong increase in average Hammer Price (HP) obtained at the evening sales in 2021.
Indeed, the average hammer price of artworks sold at the combined Christie's Impressionist, Surrealist, and Contemporary London Spring evening sales increased from 1.3 million GBP in 2020 to 1.7 million GBP in 2021, an impressive 30% price increase.
This continues a 15 year trend which saw the average hammer price of artworks sold at the Christie's London Spring marquee evening sales increase from an average of 600,000 GBP in 2007 to 1.7 million GBP in 2021.
3. Bidding competitions, a sign of a healthy demand in the art market
The overall volatility profile of the sales suggests that bidders did engage in healthy bidding competitions, which surely contented sellers, as the 8% bought-in rate was the lowest ever registered since 2007.
The best indicator for healthy bidding competitions at the auction is the fact that more than 60% of lots auctioned in the evening sales obtained Hammer Prices above their initial Low Estimates, indicated in blue in the graph above.
This shows that competition for lots was not limited to a few lots but rather widespread accross the offering, a healthly sign of demand for an auction sale.
As bidding battles went on, hammer prices went up for the happiness of sellers and the ego of winning bidders, who could enjoy the satisfaction of becoming the owners of unique artworks.
The healthy bidding dynamic resulted in a strong upside for sellers (in blue on the graph above), confirming strong appetite from buyers especially at the current level of offering, both in volume and in value.
It has now been more than a year since the Covid19 pandemic affected the auction world and forced the auction houses to rethink their business models. With the UK re-opening in the background, the performance of the London Spring Marquee sales at Christie's should bring some reassurance to sellers that the art market in on the path to recovery.
Matteo Pace contributed to this article