Claude Monet’s painting of the Grand canal in Venice is the first thing you see on arriving at the main exhibition at Sotheby’s auction house. The iridescent blue-green waters, hazy skies and pearly white domes of the “floating city” are instantly recognisable, an image that has been endlessly reproduced on postcards and tea towels.
On Tuesday this beautiful painting will go under the hammer at Sotheby’s, where it is expected to fetch between £20m and £30m. “It should perform very well,” says Helena Newman, head of impressionist and modern art at Sotheby’s. “Venice was the ultimate subject for him; it captures so much of what he was about, the play of light and water.”
Monet was 68 when he painted Venice for the first time. Every day, he set up his easel on the steps of the 15th-century Palazzo Barbaro with the waters lapping near his feet, painting views that had already been immortalised by Canaletto and Turner. The contemporary reviews were ecstatic: the Venice scenes were “the highest manifestations of your art”, wrote a fellow painter.
Today’s Monet enthusiasts talk a different language. In terms the art world has borrowed from finance, Monet is blue chip, a guaranteed sell. Last year Sotheby’s sold a Monet water lillies painting for £31.7m, the second-highest price paid for his work.
The masterpiece was sold in 10 minutes, with the bidding rising in increments of £250,000. But this was not the most expensive work of art sold last year: Alberto Giacometti’s sculpture of a stick woman on wheels, Chariot, fetched 1m (£76m) in New York.
Sotheby’s expects to raise £162m at the sale of impressionist and modern art on Tuesday. As well as five Monets, there is a precious drawing by the post-impressionist Georges Seurat of a bather emerging from the darkness, and a vivid painting by Henri de Toulouse-Lautrec of a couple kissing on a scarlet-covered bed.
The postwar era is represented by Lucio Fontana’s Concetto Spaziale, a bright white canvas slashed in 23 places by the artist’s Stanley knife (estimated price £5m-£7m), and an abstract work by Gerhard Richter, a riotous waterfall of colour 8ft tall (£14m-£20m). A similar Richter painting sold for £21m in 2012 – a record for a living artist. Rival auction house Christie’s expects to raise up to £134m the next evening, when it puts up for sale a treasure trove of impressionist and surrealist paintings.
While the financial world is fixated by Grexit– a Greek departure from the eurozone – deflation and tumbling oil prices, the art market is in the stratosphere. Like Mayfair townhouses, art seems immune to ordinary economic ups and downs. Christie’s and Sotheby’s, believed to control 90% of the art market in the UK, enjoyed record-breaking sales last year.
Global fine art auction-room sales reached .1bn in 2014, a 12% increase on the previous year, according to Artnet. In 2000-01, a typical New York auction season brought in 0m-0m in sales; the latest sales have been worth around .5bn. If art had moved in line with inflation, it would have been more like 2m-0m.
There have been bumps – a Caravaggio estimated at up to m failed to sell at a Christie’s auction in New York this week – but emerging market countries are pushing up demand.
There is a surging interest for art among the new super-rich in Asia and the Middle East. Buyers from more than 120 countries have bought art, jewellery or fine wine in London over the past five years.
When Sotheby’s put a Monet on sale in 2004, the bidders came from five countries. By 2009 a Monet attracted 12 countries, last year it was 19.
The arrival of wealthy buyers from the Middle East and Asia was credited with helping the art market avoid the worst of the 2008-09 financial crisis. Less than six months after the collapse of Lehman Brothers, the private art collection of Yves Saint Laurent was sold for €374m, smashing estimates, in a neat illustration of how the wealthiest emerged unscathed from the economic crash.
But while demand for art is mushrooming, supply is fixed. Monet painted just six views from the steps of the Palazzo Barbaro: two are in museums and a sale is vanishingly rare. As more people chase a fixed number of pictures and sculptures, the result is textbook economics: prices go up. While the value of the art market grew by 12% in 2014, the number of lots increased by just 0.5%.
“There is such intense demand for the very best and the rarest,” says Jay Vincze, the international director and head of impressionist art at Christie’s, speaking in front of Cézanne’s painting of the Marseille fishing village of L’Estaque, whose terracotta roofs and vivid blue skies radiate summer warmth.
The painting occupies a special place in art history: while the composition harks back to the classical painters of the French academy, the solid geometric shapes inspired Picasso. This work is expected to raise up to £12m when it goes on sale on Wednesday. “This is the kind of painting that will appeal to a masterpiece buyer,” says Vincze, “someone who wants the best of everything.”
The painting has been hanging in the Fitzwilliam Museum in Cambridge for almost 30 years, on long-term loan from the Courtauld family, having been acquired by the renowned collector Samuel Courtauld in 1936. But a multimillion pound bid from a publicly funded institution is unheard of. More typically, museums will be bidding on works at price points around £500,000 to £1m, and the majority of buyers are private.
Sharon Heal, director of the Museums Association, thinks the art market boom is yet another problem facing cash-strapped museums. “It is definitely an issue. Budgets are under pressure and an art market that is going up puts museums under even more pressure.”
A recent survey by the association found that one in 10 museums were considering selling parts of their collections because of financial pressures. Heal says museums have been inventive in finding ways around budget cuts, such as joint acquisitions and turning to the Art Fund charity.
Martin Roth, director of the Victoria and Albert Museum, does not see a problem when it comes to private sales of antiquities and old masters. But he agrees the frothy market for some contemporary art has left museums unable to compete. “It is a problem. We cannot afford it, no one can … If you really need it then you have to fundraise for it.”
However, he says museums must take a longer-term view about quality. A significant part of the contemporary art market “is not really related to quality and is just speculation”. He says: “That is not the museums’ world: we don’t try to participate, fortunately we are different … My responsibility is to protect young talent and to work with them on long-term perspective on a very sustainable perspective for them and for us.”
While museums avoid the art market’s excesses, some experts think the art boom is fizzling out. Melanie Gerlis, art market editor at The Art Newspaper, says falling oil prices will hit the art market harder than the financial crisis of 2008. In fact, she thinks the fallout from the financial crisis helped the wealthy because state-sanctioned money printing (quantitative easing) pushed up asset prices.
Now clouds are appearing on the horizon everywhere: Russia’s economy is sliding into recession, Europe faces a rerun of the eurozone crisis, while China’s growth is slowing. “The London sales will be a real test,” she says.
But Thierry Dumoulin, at Artnet, counters that the strong economy in the US and the spread of wealth across Asia will keep the art boom going. “All markets go through cycles though, and the art market is not any different. While it is impossible to predict the timing of corrections, it is reasonable to expect that the art market will one day experience a correction again.” At the moment though, he says: “It does not feel as if such a correction is imminent.”
For now, the world’s top 1% will continue to put their money on Monet.
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