World’s auction houses cash in on art market boom

The world’s largest auction houses have seen sales surge in the first half of the year, boosted by record prices for rare paintings and increased interest from buyers in emerging markets like China and Russia.

Privately-held Christie’s said on Monday it earned a record £1,2-billion ($2,1-billion) in worldwide sales in the first six months of the year, an increase of 38% from the same period of 2005.

Its main rival Sotheby’s, which is listed on the New York Stock Exchange, sold $1,96-billion of art in January to June, 2006, up from $1,3-billion a year earlier.

Christie’s singled out emerging markets as a key factor behind booming art prices, which culminated in June with a Gustav Klimt portrait fetching $135-million, the most ever paid for a painting.

Cosmetics magnate Ronald Lauder bought the portrait of Adele Bloch-Bauer in a private deal.

Among the highlights of Christie’s sales in the first half of 2006 were Vincent van Gogh’s L’Arlesienne, Madame Ginoux, which sold for £22-million ($40-million) and a record price for a work by JMW Turner of £20,5-million.

Sotheby’s boasted the highest saleroom price for a painting so far this year when Picasso’s 1941 portrait of his mistress, Dora Maar with cat, sold for $95-million in May, the second most expensive painting in auction history.

Industry experts are confident the art market can avoid a 1980s-style collapse, boosting the outlook for Christie’s, Sotheby’s and smaller rivals. Sotheby’s share prices have risen more than 50% already this year.

”It is a cyclical market, but we don’t see warning signs on the horizon to indicate this market is coming to an end any time soon,” said Rommel Dionisio of Wedbush Morgan Securities.

”If you look at what’s been driving the art market for the last few years, a significant portion is developing market wealth — China, Russia and most recently India.”

Looking ahead to the second half, Christie’s is offering a Picasso Blue Period portrait from the Andrew Lloyd Webber Foundation at an auction in November, and it is estimated to make between $40 and $60-million.

The biggest auction houses are also understood to be competing for the right to sell four more Klimt paintings valued at over $100-million. – Reuters

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