While auction houses results in Hong Kong continue have painted a positive picture overall for 2018, the latest auction results suggest a more cautious 2019 outlook with a possible cooling of the market in the offing.
Christie’s Hong Kong 2018 autumn auctions raised HK$2.75 billion across 17 sales in late November, an 11.6% fall from the HK$3.11 billion raised over its spring 2018 auctions and a 19.8% fall from the HK$3.43 billion the auction house had realized in the 2017 autumn sales across 18 sales. A similar market inflection could be observed at Phillips’ auctions which raised HK$305.88 million over four auctions in November, down 28.5% on its haul in May and slightly lower than the HK$318.07 million raised at its November 2017 sales (with only three auctions).
At the start of the autumn sales in September, the art market in Hong Kong was still going strong with Sotheby’s raising HK$3.64 billion, similar to the amount achieved at its spring auctions and a 15% increase on its 2017 autumn sales. But a closer look at the details may have hinted at what was to come, as several of the top lots sold below their upper estimate. Meanwhile at Poly Auction, China’s biggest auctioneer, the takings were down 50% at just HK$900 million year-on-year and were also down from the HK$1.25 billion raised in the spring.
“The sentiments of collectors are hugely tainted by the uncertainty towards the current economic and business outlook given the embarrassment of the China-US relations. Collectors in Mainland China and in Hong Kong are generally secure in terms of financial standing but they are becoming more astute,” remarks Henrietta Tsui-Leung, founder of Galerie Ora-Ora, adding Chinese collectors are not only becoming more cautious, their tastes are also changing. Tsui-Leung remains “conservatively positive” about the 2019 outlook, noting that the contemporary art market is always welcoming new collectors.
Market participants were quick to point out that results can be skewed from year to year by a few big lots or other factors, including the varying desirability of works on offer.
Jonathan Crockett, Deputy Chairman and Head of 20th Century & Contemporary Art, Asia at Phillips, said it was premature to make any specific comments on the long-term impact of the US-China trade tensions on the art market in Asia. And while he expressed concern about the rising tensions and the uncertainty it creates in the market, he points out Hong Kong is now such an important art market on the global stage that buyers and sellers there come from every part of the globe, not just Asia.
“The auction world – like every other part of the global economy – reacts to political and financial change. There are, of course, uncertainties in both spheres, but we have experienced uncertainties in the past and we know that high quality pieces at realistic estimates will continue to find buyers. The challenge for us remains to work hard and continue to deliver what collectors want,” says Edward Wilkinson, Executive Director of Bonhams Asia.
A version of this story was published in the Hong Kong Business Review (January)