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A freeze in the art market
Galleries and auction houses have fought themselves to a standstill, says Chris Carter. But there is a third option for investors in art.
The Frieze London art fair, which kicked off on Thursday in Regent's Park, is "a uniquely frantic moment in the art-world calendar", says Scott Reyburn in The New York Times. "At no other time does such a concentration of high-quality fairs, auctions and dealer shows jostle for the attention and spending of the world's art collectors."
However, this year's event has begun under a cloud. Indeed, says Belgian art collector Alain Servais, "there's a general air of worry in the galleries". Britain's vote to leave the European Union has been blamed for making collectors more cautious but the flipside of that argument is that the cheaper pound has made buying art in Britain less costly for overseas collectors. Others say the US presidential election is adding to the uncertainty.
But the real problem is that there are "too many artists, too many galleries, too many auctions, too many fairs", says Servais. Hence, this year, Frieze has drafted in ten outside curators in a bid to keep the market alive and the art fair relevant, notes Melanie Gerlis in the Financial Times. "Their presence, a greater number than ever before, underlines how art fairs strive to stand out from the crowd, as well as the influence that commercially focused events now command."
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Yet a glut of art at Frieze and other fairs isn't the whole picture, says Reyburn. "Demand has also cooled at contemporary art auctions, creating a predicament for buyers of new art from galleries: the prices dealers are asking for works are often higher than their resale value at auction."
Last month, a canvas by the young Los Angeles artist Math Bass, entitled Newz!, and bought from a gallery in 2014, netted its owner a $5,000 loss at auction. Not everybody is sorry about this. The growth of auctions in the last couple of decades has been a "tremendous machine" that has distorted the art market, Massimo de Carlo, a Milan, London and Hong Kong gallery dealer, tells The New York Times. "The art world would be better without financial expectation."
In most markets, the natural response would be to lower gallery prices. But art dealers don't dare do that, Anders Petterson, founder of London-based analysts ArtTactic, tells The New York Times. "The galleries are tastemakers who support their artists.
If they lower prices, it says something about a gallery's belief in an artist, so they stick with those levels." Faced with this attrition, particularly in the market for artwork from young artists, alternative venues for collectors and investors are the art degree shows held in May and June, as New Blood Art's Sarah Ryan noted in MoneyWeek earlier this year. Even if a young artist doesn't go on to become a big name, "you still get to enjoy the piece knowing that you have spent significantly less than on a comparable piece at a gallery or fair".
Frieze London 2016 runs until 9 October. For tickets and information, see Frieze.com. The Frieze Sculpture Park is open until 8 January 2017.
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