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Bubbles
Where, once, thoughts of ‘art bubbles’ may have conjured visions of artist Sir John Everett Millais’ famous painting “A Child’s World” (used in 1890 for advertising Pears soap), or singer Michael Jackson’s chimpanzee companion, now the art world remains in ever tense alert at the mere mention of the term.
Bubbles appertaining to any form of finance are serious matters. Bubbles speak of, what used to be referred to as economic ‘boom and bust’; defined as “a situation in which a period of great prosperity or rapid economic growth is abruptly followed by one of economic decline”.
In November 2013, Forbes was questioning “Contemporary Art: End Of A Bubble Or Already Bust?”. After speculating that the art market was slowing down, citing poor showings in both Christie’s and Sotheby’s in London that year, the conclusion was that people had left it too late. Perhaps Forbes had jumped the proverbial gun as American POP artist Jeff Koons, in November 2013, went on to break all records for art sales (by a living artist) for his "Balloon Dog(orange)“, which went for a record $58.4 million USD (approximately RM 202.764 m).
Yet, despite the obvious successes of art sales, early in 2014 there was still grave concern of an art bubble ripe for bursting. In February, Bloomberg Business Week was concerned with the practise of ‘art flipping’, the buying and selling of up-and-coming artists’ works for an obvious quick profit. Bloomberg considered this a “a sign there may be a bubble in the contemporary art market “. In May this year, The Guardian ran the headline “Christie's racks up $745m in one night – and the bubble keeps inflating”. The numbers were huge - $84.2m for a rare Barnett Newman abstraction, and $80.8m for a Francis Bacon triptych (at current exchange rates that’s approximately RM290m and RM276m respectively). Despite that initial slowdown in 2013, 2014 had proven to be a bumper year for art sales and the bubble, if there is one, continues to inflate yet.
While the art sales figures, in Malaysia, are nowhere near as astronomical as those in other countries, there are poignant signs here too of a rapid growth in the art economy. Abdul Latiff Mohidin, artist and poet, saw his “Seascape” (2013) realise RM572,000 at The Edge Auction 2014, of Southeast Asian Art. In November this year, Henry Butcher Art Auctioneers cited an accumulation of RM 2.98 million in its 9th November sale. Chong Siew Ying with “L’été” reached RM89,600, while it was estimated to reach only RM28,000 – RM40,000, and a record price (RM50,400) was set for Datuk Ibrahim Hussein’s “Somewhere Last Spring” (1965), for a work on paper.
The Wall Street Journal (in Malaysia’s Art Scene Is Changing With New Auction Houses, October 16 2014) reminds us that Malaysia now has four art auction houses; The Edge Auction, KLLifestyle Art Space Auction, Masterpiece Auctions and the Henry Butcher Art Auctions. The number of art galleries have grown exponentially, and continue to jostle for position amidst the stratification of Malaysia’s art world. Stories abound of unscrupulous art galleries marking up prices of Malaysian artists’ work, and of price hiking of popular Malaysian Abstract Expressionist works, while Malaysia rides high in the wake of a tsunami of Asian art buying, lead by China.
As well as a proliferation of art galleries and art auction house, Malaysia is host to a variety of art brokers. They come in all shapes and sizes. Some private galleryists double as art brokers, brokering high-end artists’ work, such as Andy Warhol’s “Unknown Woman” (1984) retailing at $1.7M USD, and Warhol’s “Liza Minelli“ retailing at $ 5.000 000 USD. Others, concentrating on Modern and Contemporary, are encouraging Malaysians to invest, not in Malaysian art, but in art from China. One art brokerage company will escort potential investors into their small office, then flood the unwary with ‘Art Market Reports’, ’Art and Finance Reports’ and the ‘Deloitte ArtTactic Art & Finance Report (2013)’. They will wave mid-career Chinese artist portfolios, such as the works of Niu An (Ann), before their faces until visitors start to waver. At that point the CEO is brought in to clinch the deal, quoting an 86% increase in the art market over 12 years and a 120% increase in the Asian art market over the previous 5 years, and how the artists they are promoting, at that moment, will not be available tomorrow. Better get in quick before the opportunity is lost!
The potential art bubble, if there is one, shows little sign of bursting during the year end of 2014. Art prices across the world increase at an astronomical rate, seemingly little effected by similar bubbles in housing, which have already burst. While China proves to be a strong market, the Malaysian art market continues its slow climb into respectability.
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