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Market Shifts Away from Auction Model Towards Dealer Sales

March 6, 2017

Rachel Pownall

Tefaf’s annual report on the health of the art market is out and there were some interesting findings.  First, there is a new author – Rachel Pownall, Professor of Finance at Maastricht University School of Business and Economics (Clare McAndrew was the former author, but she moved over to the competition — Art Basel).

Pownall used a different methodology for her report and the total value came in at $45B (far below McAndrew’s $63.8B from last year).  Now one might say this is a bad sign for the market; however, McAndrew used far more galleries in her report (69,000 dealers in the US alone — a crazy number); Pownall reduced that number to 21,000.  According to Pownall, if she had used McAndrew’s methodology, this year’s number would have been slightly higher.

Over the past year, we have reported on changes in the market … less material hitting the auction block and more important works being offered privately.  Well, Pownall’s report supports this: Sales through dealers and galleries have risen by 24 per cent, with auction houses’ private deals at around $2bn in 2016. Pownall calculates that dealers’ sales accounted for around 63 per cent of the market, far higher than previously assumed (around 50 per cent).  I know this number is even higher because many dealer’s private sales go unreported and are not included in the Tefaf report.

Source: TEFAF Art Market Report 2017