Inflation is a plus: Top auction houses are trading at higher volumes in 2021, setting multiple historical records

Financial Associated Press (Shanghai, editor Shi Zhengcheng) news, the rising inflation in 2021, but also reflected in the art auction market vividly exquisite, and even became a wind outlet to promote transactions.

At the beginning of this week, Christie's auction house released preliminary fiscal year data on its official website, announcing that this year, with the blessing of phenomenal auctions such as Picasso's "Woman Sitting in front of the Window" and NFT darling Beeple, the annual transaction volume reached $7.1 billion, which is also a new high in the past five years.

(Source: Christie's)

Just last week, another auction giant, Sotheby's, also announced a total of $7.3 billion this year, a new 277-year record high for the company; the slightly smaller Phillips auction house also achieved a record high of $1.2 billion this year, driven by the enthusiastic pursuit of works by contemporary artists Sarah Hughes and Eva Uskevich.

With the three major auction houses all reporting strong sales, it shows that collectors are showing a high degree of enthusiasm for art in various categories and at different prices. Christie's chief executive, Guillaume Cherutti, said the rebound in the auction market would also persuade more sellers to bring their collections to market next year, especially in the context of continued high volatility in financial markets and rising prices due to inflation.

Cherutti further said it was impossible for Christie's clients not to be aware of the external economic environment, but they now knew that auction houses could operate well in the face of economic uncertainty. Another reason why high inflation benefits the industry is that there will be a greater need for something that can preserve value, making the auction market more resilient.

After the pandemic hit the auction industry hard, Christie's revenue surged 54% this year compared to 2020 and 22% higher than in 2019 before the pandemic. Of the $7.1 billion, 5.4 billion came from auction revenue, and another 1.7 billion was privately negotiated, which also hit a record business record.

In addition to inflation, the collective entry of a new generation of collectors also drove the company's performance. Christie's said 35 percent of bidders this year, a third of whom are millennials, are bidding for the first time at the company.

The large number of new players bidding will undoubtedly have an effect on pushing up the auction price. Christie's "Woman By the Window" (Picasso, 1932), auctioned in May, was the highest-priced item of the year for $103 million, nearly doubling the estimated $55 million when it hit the shelves.

In addition to traditional artworks, Christie's also successfully sparked the enthusiasm for NFT auctions this year with digital artist Beeple's Every Day: The First 5,000 Days. In addition to Beeple's work sold for $69.3 million, Christie's overall NFT auction turnover this year also reached $150 million. As an alternative investment track, the category already accounts for nearly 8% of Christie's modern art category transactions.