2 March 2004

Australian Auctions roundup, March 2004

After another record year in sales in 2003, the Australian fine art market has entered its second decade of sustained growth, still some people are never satisfied. When Deutscher~Menzies kicked off the 2004 season earlier this month with the highest grossing mixed-vendor sale of fine art ever held in this country – more than $8.4 million - it was greeted with either sublime indifference or churlishness at the failure of several high-value works by high-profile artists to sell, and of others to only meet the low end of the estimate set by the auction house.

One pundit dubbed the sale “a patchy start” to the year, pointing to passed-in works by saleroom favourites like John Brack, Norman Lindsay and John Olsen. Keen market watchers wondered if D~M had overestimated the strength of the top of the market, others saw instead "buyer fatigue" in the face of the runaway price inflation of some “top drawer” artists in recent years.

D~M’s national director, Damien Hackett, told The Bulletin his firm was “very concerned when high value items pass in, during any sale, but this can and does happen for many reasons, not just a weakening of the market… each sale is an individual transaction with its own specific circumstances attached.”

“With regard to John Brack,” said Hackett, “we had estimated Backs and Fronts ($450k to $550k) believing it to be one of the most important works to have come onto the market ever. The result, at $477,825, was in fact the fifth highest price ever achieved for a Brack. One important collector decided not to bid on the Brack, as he intended, because a family tragedy occurred a few days prior to the sale."

Hackett maintained the market for Brack remained strong, despite another work, The Club from 1989, passing in on an estimate of $230,000–260,000. He put the poor showing of other works down to “a number of clients who thought that some of the high value works would ‘fly’ and so did not enter the bidding. As a result, they were dismayed that they had missed out on things, especially the (Ian) Fairweather and the John Olsen”. Rather, the number of dealers buying, or under-bidding, on works in the $100,000 plus market meant “you would expect that (the dealers) are confident that there is more growth in the top end.” After $91 million in sales nationally last year, a 15 per cent increase on 2003, we guess they would be confident.

However one sector keen to get out of art quicksmart may offer the first tangible signs of a market reaching its tipping point. The great Australian corporate art sell-off resumed in 2004 with last week’s dispersal of Western Mining Corporation’s corporate art collection at Sotheby’s rooms in Melbourne. An aggregate of $1.28 million would have pleased WMC patriarch Hugh Morgan, the gross just pipping the high estimate for the entire sale. And with 21 new individual artist records – most notably for the late 20th century modernist, Leonard French, and moody Melbournite, Rick Amor - at least WMC found out they'd bought the right works. The clearance rate was an astonishing 98 per cent by lot.

Corporate sell-offs have become the bedrock of Sotheby’s market leadership in Australia: in the past two years they’ve flogged off the once-prized collections John Fairfax Ltd, BP, AXA and Kerry Stokes. Several other firms have sold off their collections confidentially through the saleroom, and Sotheby’s Managing Director, Mark Fraser says he knows of no major corporations that have started collections in that time. It will be interesting to watch for any moves by Wesfarmers, Macquarie Bank, Westpac or ANZ to liquidate their art assets. Fraser nominated these companies as having the finest corporate collections still extant in Australia today.

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Abridged version published in The Bulletin