After two years of exhilaration, a sense of tranquillity has taken hold! The Ultra-Contemporary art market has found a steady pace after the vibrant momentum that followed the post-Covid period. 

 

Annually, Artprice.com delivers a comprehensive report on the global Art Market, with a particular emphasis on Contemporary artists (born after 1945), utilizing auction sales data. This year's report, spanning from July 1, 2022, to June 30, 2023, places a spotlight on Ultra-Contemporary Art, featuring artists under 40. 

 

 

Sotheby's The Now sale on November 16th, New York. 

 

 

After two years of remarkable growth and a historic surge in auction turnover following the Covid crisis, the Contemporary Art market seems to have followed the broader trend seen across the art market. The post-pandemic surge appears to be a cyclical movement, with global turnover expected to return to a more moderate and restrained growth trajectory.

 

In 2020, the Covid crisis led to unprecedented constraints, resulting in a near paralysis of auction sales in the first half of the year and the temporary unavailability of the masterpieces that typically drive the market. Following this period of forced inactivity, auction houses, including Sotheby’s, Christie’s, and Phillips, swiftly rebounded. They secured prestigious consignments at the beginning of the summer of 2020, and collectors eagerly re-entered the market. In 2021 and 2022, museum-quality pieces from renowned collections fuelled a series of exceptional auction sales in the Modern Art and Post-War segments, with the Contemporary Art segment achieving a new 12-month record of $2.7 billion.

 

After this exceptionally prosperous 2021/2022 period, the results from the Contemporary art segment now appear more modest, with an overall turnover of $2.29 billion in 2022/2023—the fourth-best performance in history. Despite the apparent contraction in the past year, it is crucial to note that this reflects, above all, an unfavorable comparison effect due to the exceptional performance of the previous year. 

 

Evolution of annual Contemporary art auction turnover. ©artprice.com

 

Significant fluctuations in the overall turnover of global art auctions are largely influenced by the presence or absence of works by a select group of 'blue-chip' artists capable of commanding tens of millions of dollars.

 

The commanding signatures of Contemporary Art, valued at tens of millions, constitute a substantial portion of the segment's auction turnover—specifically, a staggering 85% of the global total, equating to $1.9 billion, is attributed to the top 500 selling Contemporary artists. Remarkably, nearly one-third of the entire global turnover for Contemporary Art originates from just ten prominent artists.

 

While the inclusion of works by blue-chip artists enhances the prestige of both public and private collections, the prices they attain are fundamentally tied to the financial capacity of prospective buyers, the substantial sums they are willing to invest, and their aspirations to set new auction records.

 

Despite the opulence witnessed in recent years, the artists occupying the upper echelons of the pyramid are currently undergoing a cyclical downturn. In the 2022/2023 period, the collective auction turnover for the top 10 stars in the Contemporary market contracted by almost $188 million compared to the previous year.

 

Contribution of top-selling artists to global Contemporary art auction turnover:

 

In the 2022/2023 period, bids exceeding $10 million were received for only four Contemporary artists: Jean-Michel Basquiat, Jeff Koons, Yoshitomo Nara (twice), and Christopher Wool. This marks a stark contrast with the preceding year (2020/2021) when the $10 million threshold was surpassed 26 times. 

 

Basquiat (1960-1988) stands as a major figure in the Contemporary Art market. In the 2022/2023 period, an impressive six out of the eleven results surpassing the $10 million threshold were attributed to works by this artist. Notably, his piece titled El Gran Espectaculo (The Nile) (1983) emerged as the only Contemporary work to have fetched a price exceeding $50 million.

Jean-Michel Basquiat, El Gran Espectaculo (The Nile), 1983.
Acrylic and oilstick on canvas mounted on wooden supports, in 3 parts, 172.7 x 358 cm (overall).
Sold for $67.110.000 (May 2023, Christie's New York)

 

 

The Ultra-Contemporary art market has stabilized to a more measured peace following the exuberant surge in the post-Covid era. These artists, aged below 40, courted by influential art galleries, have injected dynamism into auctions across global art hubs like New York, London, and Hong Kong. The Ultra-Contemporary art segment has witnessed increased density. The number of artists under 40 in the auction market has increased from 500 to approximately 2.600 in the past two decades. This market expansion, coupled with the exceptionally high valuations of select young artists' works, has evolved into an increasingly compelling market segment.

 

Following the prolonged period of restricted art market activity during the health crisis, buyers sought to reconnect with artistic creation by acquiring works from very young artists, particularly through auctions. The appetite for the freshest and newest works was palpable, and the auction turnover contribution from artists under 40 exceeded $200 million for three consecutive semesters, spanning H1 2021 to H1 2022. However, in the subsequent year, the momentum slowed, and results aligned with the broader trends in the art market.

 

After the peaks recorded between January 2021 and June 2022, the Ultra-Contemporary art market generated $127 million in H1 2023. Similar to the overall fine art auction market, the decline in turnover from Ultra-contemporary art in this year was attributed to a reduction in ultra-high-end transactions, with results in the six or seven digits range shrinking by almost 45% compared to the first half of 2022.

Half-year auction turnover totals from Ultra-Contemporary art. ©artprice.com

 

Despite the thinning of the high-end segment, the majority of collectors remained highly active at auctions. Demand remained robust, with over 4.500 Ultra-Contemporary works exchanged in H1 2023, compared to an average of 3.000 in each semester before the health crisis.

Half-yearly change in the number of Ultra-Contemporary works sold at auction. ©artprice.com

 

While Ultra-Contemporary art constituted merely 1% of Christie’s Fine Art auction turnover, totaling $24.4 million in H1 2023, it comprised approximately 3% of Sotheby's turnover, reaching $53.8 million during the same period, making Sotheby's the leading auction house in this sector. In contrast, Phillips, with a more pronounced focus on the Ultra-contemporary segment, derived 9% of its turnover, amounting to $24.5 million in H1 2023, from this particular niche in the art market.

Top 3 auction houses for Ultra-Contemporary art (H1 2023). ©artprice.com

 

Over the past two to three years, the artworks of exceptionally young artists have commanded striking prices in auctions held in Hong Kong, emerging as a prominent hub in the Ultra-Contemporary art market alongside New York and London. The most highly valued artworks in sales conducted in Hong Kong predominantly originate from non-Asian artists. Topping the list this year are Matthew Wong, Avery Singer, Loie Hollowell, Lucy Bull, and Jadé Fadojutimi, all achieving results surpassing the million-dollar mark.

Geography of auction turnover from Ultra-Contemporary art (H1 2023). ©artprice.com

The Contemporary art market witnessed an exceptional growth in 2021 and 2022, marked by unprecedented results following the easing of Covid-related restrictions. The scarcity of offerings in this segment has led to a 22% decrease in transactions involving 7or 8-digit sums. The overall sales turnover in Contemporary art has experienced a 15% decline compared to the previous year, reflecting an anticipated adjustment following the post-pandemic frenzy. 

 

Despite this, the period set a historical record for the volume of Contemporary artworks exchanged at auction, with over 123.000 works changing hands. While multi-million-dollar transactions dominate, representing a micro-market for the elite, the lower end of the market (works under $5.000) is experiencing significant growth, constituting 80% of the global transaction volume. 

 

Collectors are actively seeking works by new artists, with the Ultra-Contemporary segment witnessing a 30% increase in transactions compared to the pre-Covid period. Bidders remain highly active for works valued under $50.000, and, while avoiding bidding wars at higher price levels.

 

The Ultra-Contemporary art market is faster than the other markets, causing trends to evolve rapidly, as seen in auction results. Today, the Ultra Contemporary market can sometimes offer higher profits for investors and speculators compared to secondary market artists on a buy-sell basis.

 

The market’s gains are exponential. However, they are also a trend initiated by mega-galleries, in collaboration with museum curators and their wealthy clients, who sustain the market, but for how much longer?

 

This is a complete system that effectively introduces artists to the art market while ensuring their value will not fall. The sector is exclusive, involving just a few actors, resulting in artworks that are almost unattainable for the average person. Waiting lists for purchasing artwork can be extremely long, sometimes endless. Certain galleries prioritize collectors who have made previous purchases, and in certain instances, donating a painting to a museum may be required to acquire a new piece.

 

The Ultra-Contemporary market fad leads to speculative buying, which can be detrimental to the long-term careers of young artists….

 

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