The share of auction guarantees in 2019 decreased by 18 %
ARTinvestment.RU   26 декабря 2019

Experts attribute this decline with a General decline of art-рынка this year

In 2019, according to a report by ArtTactic, the total cost of works of postwar and contemporary art, the purchase of which was guaranteed by third parties, fell to $1.08 billion, which is 18% less than last year.

However, for those who still dare to act as a guarantor of the transaction (especially at the auctions of the "big three" Christie's, Phillips and Sotheby's in London, new-Йорке and Hong Kong), the attachment resulted in an average growth of 11 %.

guarantee the sale of works of art can be so profitable for collectors and other "third parties" that they are increasingly taking out loans, even bail their own collection, only to participate in such transaction.

the terms of such guarantees are slightly different in each auction house, but usually they all include a warranty and selling works of art at a fixed price, pre-agreed between the owner of the work, the auction house and the third party.

if during the auction the artwork is not sold, the third party providing the guarantee, becomes the owner of the lot at a predetermined and fixed price. But if the work is sold, then the guarantor receives a portion of money in excess of the guaranteed amount. That is, if the collector, acting as the guarantor, guarantees the price of $10 million, and it sold for $12 million, then the guarantor receives any-то a share of $2 million If no one bid during the bidding on the lot does not exceed $10 million, the picture is not sold: the guarantor pays the guaranteed sum to them and takes a picture of himself.

In 2019 was purchased only 1 % of such guaranteed lots. For comparison: in 2018, it was 2.2% in 2016 — is 4.2 %. However, the warranty has paid off for many collectors with an average yield increase of 11 %. Although the yield of 11% is quite a high figure, but it is significantly below the peak figures of 12.7 % in 2018. The lowest rate was recorded in 2015 when the yield amounted to 9.7 %.

the Drop in the total cost of guaranteed jobs in 2019 cannot be called a surprise, given the General annual decrease in sales of art. Although the final numbers for the year are not counted, only the results of the evening auction of postwar and contemporary art in November 2019 in new-Йорке at auction Christie's, Sotheby's and Phillips showed a drop in sales of 31.5% and a fall auction guarantees of third parties on 33 %, compared to the previous year. The total for the auction of the November Troika guarantees amounted to $360,5 million, or 66% of the lower estimate of the total lots of directories.

Experts ArtTactic suggest that falling prices for works of art at the top of the market actually indicates a decline in risk appetite among collectors of high class. "It seems that the guarantors in the West all the more nervous, preparing for next year" — according to the report.

a Bright spot in this story was the fact that the growth guarantees for the work of women-художников. In this year of 10.5% guaranteed all work was performed by women-художниками that above 6 % in 2016-м, the average price of these guarantees rose to 90% regarding guarantees for the works of men-художников, well above the 52% in 2016.

The largestgain guaranteed deals among women-художников showed sales of works by Louise Bourgeois: the amount of guarantees on them jumped to $31.9 million this year with $900 thousand in the previous year.

overall, nearly 73% of all guarantees from 2016 to 2019 have been provided for first top 25 artists, with almost 27 % — warranty on the work of Jean-Мишеля Basquiat ($436,8 million), Andy Warhol ($398,3 million) and Gerhard Richter ($230,6 million).

the Material was prepared by Maria Kuznetsova, AI

Source: arttactic.com, barrons.com

for More on the auction guarantees to third parties read on AI:
the Auction guarantees of third parties: the possibility of reducing risk and profit