Update On The State Of Asian Art
By I. M. Chait -
In December of 2008, I sent out a letter (see below) going over my viewpoints as to economic uncertainties, both in America and internationally. This letter was received favorably by many of you and with positive comments. Four months later and on the occasion of my 63rd birthday (of which 40 + years have been spent buying and selling Asian art), I’d like to again address this subject. The subject is the effect of the world economy on the art and antiques market in general and the effect on our own business, here in Beverly Hills.
The early 15th Century blue and white Yongle bowl that sold for $2+ million. (Photo, courtesy of www.Christies.com.)
In the letter of December 2008, I quoted myself in saying that there would always be lovers of art and that fascination with art and artifacts would never stop. I still maintain that viewpoint, and history has many times over shown it to be on firm ground. We at Chait Gallery/Auctioneers have never been busier. While it’s true that gross revenues on some auctions might be down a bit, while it’s true that the average auction might have more unsold lots than previously, and while it’s true that prices in some areas have softened overall, people are still buying Asian antiques, sometimes for very high prices and sometimes for huge bargains.
More and more, the market for Asian art has truly become international. For those of you who pay attention to Asia Week in New York, this last March saw phenomenal prices at both Christie’s and Sotheby’s with hammer prices exceeding auction estimates by multiples—many times, ten times or more. Just to illustrate, three porcelains: an early 15th Century blue and white bowl, Yongle, brought over $2 million; a Yongzheng vase, not mark and period, but with a Ming mark, brought over a million dollars, and an early 18th Century Yongzheng chicken cup brought over a half million dollars.
While we usually don’t have items selling in these price ranges, my point in illustrating these items is that each brought many multiples of their estimates, and each was purchased by or for overseas buyers.
Similarly, as evidenced by a minor two-day auction held not long ago, out of the 600 lots sold, 500 or more were shipped out of southern California or out of the country.
The world of art and antiques truly is a supply-and-demand marketplace. If demand has been artificially created to raise prices in certain categories, that demand will not be sustainable, especially if there was no basis for the high prices to begin with. The notion that all art is a good investment was created by someone selling an overpriced piece of art. It has been proven that much art and many antiques have turned out to be a quite good investment. The criteria for items to become worth more are not only based on supply and demand, but also on several subcategories. Those subcategories include:
*Material (What is it made out of?),
*Workmanship (Of its kind, how well executed is it?), and
*Age (How old is it?).
In Chinese ceramics, items that are 200 hundred years old often bring more than items that are more than 2,000 years old. Age is not always significant, but attractiveness of an object is significant. Some things can be rare but quite unattractive, much less beautiful. Quite often, the beauty of an item will profoundly effect and overshadow any concepts of material and age.
As you can see, none of this is rote, but it can be understood in looking at the “big picture.” For example, why are Imperial Qing porcelains collected by Chinese? The answer is because they were part of the Dynastic Heritage of China. They could not be owned by the ordinary person, much less ever seen. It was only after these porcelains went on view in the Palace Museum in Taiwan and in the Forbidden City in Beijing that the rising middle class and rising wealthy in China could see these examples, desire the connection with The Palace, and bid on them at auction.
Why has ivory become suddenly much more collectable, or rhinoceros horn or amber? Those are categories in which the most important value functions are material, because of their scarcity and workmanship. Age plays less of a role, especially in ivory; which, if it was carved 40 years ago, is quite “old enough.”
In all these various collecting categories of Asian Art, there are specific reasons as to why things may be up or down. For jade carvings, the quality of material and workmanship are most significant. For Buddhist bronzes, which up until some years ago in China were locked up and unavailable for view by a government that did not advocate any religion, much less Buddhism, are once again hot.
I could go on and on. Suffice it to say that there still is a thriving market for Asian art. This is a market that is actually growing due to the Internet, and while one could say that what’s being offered online is very often fakes being advertised as genuine, there are numerous reliable dealers and auction companies that stand behind their merchandise, that sell genuine objects, and that can be trusted to consign items to or purchase from.
My advice is, don’t stop. If you are short of money, sell some things and then buy other things with the money you have made. In the end, this is the best policy because once this economic slump is over, you will be very glad to have those things.
***
I.M. Chait’s December 2008 letter:
In these uncertain economic times, I have been asked over and over how the world economy is affecting the art and auction markets and specifically our own business, here in Beverly Hills. In 1991, I was interviewed for the Financial News Network, and I repeated a statement I made in the 1980s when it looked like the economy was tumbling into non-existence. I will again quote it here:
“Regardless of economic fluctuation, recessions and inflations, there is one area of investment that continues to prosper. Whatever condition the world may be in, there will always be lovers of art, and people will never stop their fascination with artifacts and artistry from ancient cultures.”
This still remains true today.
History has many times over proven that, when housing and financial markets crash, antiques, art, precious stones and metals retain their liquidity. Having 40 years of experience in these markets, we have seen in action the accuracy of that last statement again and again.
We at I. M. Chait Gallery/Auctioneers in Beverly Hills are extremely busy with numerous potential consignments and with inquiries from all over the world from new collectors just entering the marketplace and looking for direction. In each and every case, we have advised all that have inquired, especially in the area of Asian art, that prices on important and quality items continue to rise. This is based on many factors, the primary one being that of supply and demand. Scarcity of an item and its broad appeal to collectors and investors fuels this demand.
Each week for the last few years, new auction companies have sprung up all over China. We recently received a catalogue from a new Chinese auction company that was four inches thick with 2,500 objects being sold in one day.
This is not a unique occurrence. As you all know, the population of China is vast, and in the past couple of decades, there has been greater and greater freedom allowed that population, in terms of economic activity. This has created a vast middle class. That so-called middle class is hungry for Asian art. If you add to this the fact that “Overseas Chinese” are the wealthiest group on the planet, you can see that there is no shortage of demand potential.
If one looks at auctions around the world, one could be shocked that over 1,000 new auction records have been set just this last year alone, according to Artnet.com. This is directly the result of the international economic upheaval and the vast quantities of dollars and collectors emerging from Russia, China and India. Do they know something we don’t, or have we just forgotten that in past economic slumps art, antiques and collectables remain one of the few stable and liquid commodities?
While it’s true that some objects may dip in value, it also remains true that anything of high quality is immediately saleable, as well as expensive, due to the demand for quality. Our auctions, as an example, continue to improve, and each month, quality items bring better and better prices. Most of these items are being sold to buyers out of California, and more often than not, sold and shipped out of the continental United States. There is no doubt in my mind that this will continue to be the case, thanks to the World Wide Web, and this is extremely good news for both buyers and sellers.
If we look to the media, they, of course, only point out the extreme, the worst, the most disappointing facts and scenarios. It is not in their best interest to point out all of the millions of successful purchases and sales that do occur around the world. They are keeping this good news a secret.
Anyone nowadays with access to the Internet (including China, India and Russia) can easily view hundreds and hundreds of auctions and get a feel for the market. Given a little time and effort, they can also come to understand where prices may have been artificially or incorrectly kept high and are now stabilizing slightly downward. This is the natural rhythm of a supply and demand marketplace.
Of course, there is no way to exactly predict or guarantee successful investments, except for the few standards that have always applied. Those standards are:
*Buy the best quality of the type of item that you are most interested in and that
you can afford, and
*Buy from reputable firms that will guarantee the age and authenticity of what
they are selling.
This applies to buyers. To sellers, I would recommend they rely on established firms that have a solid reputation in the areas of what is being sold, have an international clientele, and of course, have a strong online presence as well.
Thank you for listening.
I. M. Chait
