Billions amassed in economic booms in China, Russia and India are heading into a hot global investment – artwork – pumping the art world up for its biggest year ever.
Collectors are agog over the huge piles of new cash searching for relatively unknown or ignored works by artists from places such as China, India, the Mideast and the peasant backwaters of Russia.
Experts say demand has triggered an exuberant scramble for these works, causing their prices to skyrocket by as much as 100-fold in just months.
“The newly rich in China, Russia and India are a prime factor heating up this market,” said Milton Esterow, editor and publisher of ARTNews, which tracks the industry.
“The tantalizing thing is they’re first buying up all the treasures they can find that had been taken out of their countries year earlier,” he said.
“They’re investing heavily in the traditional Impressionists and Modern works because of the huge returns they’ve generated. They’re pushing up all parts of the market.”
Spending on Russian art alone is up a whopping 166 percent, while Chinese art sales are up 74 percent in the past year, according to regulatory filings by auction house Sotheby’s.
“China and Russia sales are up dramatically,” said Bill Ruprecht, CEO of Sotheby’s, which is rapidly opening auction houses in major cities of Asia, India and Russia to ride the boom.
So is its main rival, auction house Christie’s, which also is expanding to Mideast capitals where oil billionaires and their agents travel the globe for Islamic art that had been spirited from their lands by British colonialists decades earlier.
Sotheby’s and Christie’s are going head-to-head in a battle here next week for Russian buyers with rival auctions of hundreds of Russian treasures dating back more than 100 years.
The pieces include relatively obscure Russian artworks that only a year ago sold for a few thousand dollars but now are on the block for hundreds of thousands.
For example, Christie’s in recent months got $2.9 million for a 1919 painting by Boris Kustodiev – seven times its opening bid – and more than 100 times higher than the $30,000 it originally fetched when Christie’s last sold it in 1989.
Sotheby’s also set a record for the highest price ever paid for a Russian painting – $3.7 million for a 1912 still life by Ilya Ivanovich Mashkov.
Chinese art regularly breaks records. A small porcelain jar from the Yuan Dynasty sold for a whopping $27.6 million last summer at Christie’s.
In China, newly wealthy artists are the new celebrities. Painter Zhang Xiaogang, 47, a year ago stunned China’s art circles by getting $90,000 for a painting.
But in a sale at Sotheby’s here two weeks ago, one of the painter’s works sold for a record $979,000. It was purchased by a Singapore collector who wanted to keep it in China.
“It’s mind-boggling to see such enormous and quick rises for any artist,” said Esterow.
“It’s just the tip of the iceberg of what’s going on.
“A lot of American and European collectors are buying up what few Chinese artworks are out there.”
Demand for Indian art is also so strong that a new gallery recently opened in Manhattan just to handle the collectors and speculators in search of potential windfalls.
“Indian collectors are in New York and London are buying Indian art like crazy,” Esterow said
One recent sale here of a 1979 work by Indian painter Maqbool Fida Husain fetched $576,000. A few years ago it would have sold for just a fraction of that.
The demand for potential bargains is so strong it prompted a New York-based specialist on Indian art, Sundaram Tagore, to take the plunge and open his own gallery in recent months.
Esterow’s publication compiles an annual list of the world’s top 200 collectors.
“It used to be rare to see someone from India or China or Russia on the list. Now they make up more than 15 percent of the people.”
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Bidding up
Sales are rising at premier auction houses, as the new super rich in China, India, Russia and the Gulf join the Wall Street wealthy in hot pursuit of high-priced collectibles.
Great year
Revenue including fees (2005)
Christie’s $3.2B Up 38%
Sotheby’s $3.3B Up 4%
Yuan Dynasty jar
Sales of Chinese, Russian and Indian objects grew 98% last year*
*Source: Industry reports and SEC filings