The headline-grabbing sales at the recent end-of-year art auctions at Strauss & Co and newcomer Aspire Art Auctions were certainly the Alexis Prellers. Strauss & Co sold two Preller works for more than R6.5m each at its November 7 auction in Johannesburg. At the inaugural Aspire auction in Johannesburg on October 31, a Preller painting, Profile Figures (Mirrored Image), fetched just over R7m. In their wake, several more Prellers, Irma Sterns, Pierneefs, Battisses, Kentridges and Hodginses sold for between R1m and R2m.
There can be little doubt, based on results like this, that the top end of the SA art market is in good shape. As the late Stephan Welz, MD at Strauss & Co and long the dominant figure in the world of fine-art auctions, often said: "There is an undeniable appetite for high-quality art that represents the best examples of an artist’s work."
Strauss & Co joint director Bina Genovese said: "In our 2015 chairman’s report we indicated that for the first time since we opened eight years ago, our year turnover had surpassed the R200m mark. This year our turnover is over R213m. "
But 2016 has been a year of changes in the world of fine-art auctioneers. Perhaps the most talked-about change has been the launch of Aspire, backed by Adrian Gore and Brian Joffe. Strauss & Co’s strong performance, and Aspire’s robust start, cracking a lot average of R315,000 for its smaller but carefully curated selection of 120 works, seem to tell a promising story.
George Herman, Citadel head of SA portfolios, who writes the Citadel art price index (Capi) report twice a year, says it is still too early to say if the market has grown in the second half of 2016. He receives data from a panel of auction houses at the end of the year, so the index will reveal the overall state of the art market only early next year.
He seems doubtful of any major changes since his update for the first half of 2016, which showed a decline in total volume and turnover against the same period in 2015. The Capi 100, measuring the top 100 works, however, was down only 0.1%, and the Capi 50 and Capi 20 (sub-indices for the top 50 and 20 works respectively) were both "a touch stronger than it was for the 100".
"In difficult times, people go back to what they know and what they trust," says Herman. "Let’s call it quality."
Though he says the recent overall decline reflects a correlation he has noted from the inception of the index between the performance of the art market and the Chinese markets, he still considers art "a fantastic market" that historically keeps its value during testing times.
He says equity markets have been "literally flat" for two years. "When normal financial assets have a tough time, people start looking at casting the net wide, and then alternative assets or passion investments often come onto the radar screen," he says. Art certainly falls under that category.
"As South Africans, we’ve had a long period of a weakening currency, and all these passion investments are typically dollar-based investments, and that’s another reason why [art is] building up a credible track record of keeping its value in dollars," he says. That does, however, apply mostly to the top end of the art market.
Dale Sargent, a close observer of the auction market, says he has been impressed by the recent auctions he has attended. He has seen a range of great performances from artists at the two already-mentioned auctions as well as at Russell Kaplan Auctioneers slightly before them. Sargent is the founder of AuctionVault, a "comprehensive SA art portal comprising more than 50,000 SA art auction results from more than 4,000 artists".
He says that based on initial observations, there seems to be activity and great prices being achieved in the midmarket, too. "In your R60,000 to R200,000 market, there’s a lot going on," he says. He points to works by Norman Catherine, Erik Laubscher and Larry Scully that went for well above their presale estimates. "The guy with R50,000 to spend is out there active in the market," adds Sargent.
Both Sargent and one of the founding directors of Aspire, Ruarc Peffers, say they feel there have been new faces at the auctions and possibly new investors, too.
"Whether the buyers were all the same, I don’t know, but both of the [most recent] auctions were well attended, and there were different faces and new faces," says Sargent.
This may be driven partly by curiosity and the buzz created by a new entrant into the market, backed by high-profile businessmen, but Peffers is optimistic about the prospects of the art world. "Generally speaking, we believe our entrance into the market is just going to contribute to the expansion of the market."
Time will tell, and Herman cautions that the art market cannot be seen in isolation. He says when financial assets rally and investors liquidate their wealth, only then does it trickle down to the art market.
Meanwhile, Sargent points out some changes he has observed. "The market is probably more educated than it was a few years ago," he says. Through services such as AuctionVault, it’s possible for buyers to have a clear idea of what they should be paying.
He also expresses the widely held belief that with new entrants, the market will become more competitive. Sargent suspects that all the auction houses, across the board, are "putting time and effort and research into what goes onto each auction". He’s noticed an uptick in the intensity in the marketing of the auctions.
Peffers agrees: "I think the SA market is maturing and becoming more refined. It is more discerning than it was even five or 10 years ago. There’s an increasing awareness of what good examples are compared to medium ones."
The result, he believes, is a maturing of the market, with auction houses working towards more carefully curated sales.
He points to a growing professionalisation of the art market, and how it has changed in the past 10 or 15 years. Of course, he says, it has to start with high-quality artwork, and he doesn’t believe there is any "discernible difference in the quality of what is produced in this country compared to America or the UK or France or wherever".
He adds that galleries have become highly professional. "Then you have the whole proliferation of art fairs," he adds. "There are now three art fairs in this country, never mind all the other ones around the world.
"I’ve been in this game for only 15 years, but when I was an art student, if you had told me ... that we’d get to a point here where there were three art fairs in this country, and 30 SA artists in international biennales being sent around the world every year, I wouldn’t have believed you."
He has noticed "international museums and institutions that were interested in acquiring work from SA artists", including contemporary artists: "It’s not just William Kentridge they’re looking for."
Peffers believes there is a shift across the market to become less elitist and exclusive.
"A much broader variety of people are developing an interest in the arts. And the industry is doing the best that it can to try to make it more inclusive."
Herman ended his 2015 Capi report with the words: "The current decline in prices should, therefore, be seen as a great opportunity to buy art now."
Whatever the 2016 indices reflect, the message will most likely be the same.
It would certainly seem as if, between the growing discernment of collectors and the increasing professionalisation and competitiveness of the art industry, the industry will be well equipped when the market turns.