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The Korean Art Auction Market in the 3rd Quarter of 2022 Saw a 62% Decrease Compared to the Previous Year

2022 3rd Quarter Art Market Report by KAAARC.

Market analysts anticipate that the Korean art auction market is now in a downturn. According to the 2022 3rd Quarter Art Market Report published by the Korea Art Authentication & Appraisal Research Center (KAAARC) on November 14, the total amount of successful bids made at eight auctions between July and October totaled 33.67 billion KRW (approximately $25 million), a 62% decline from the previous year.

This is a decrease of approximately 52% compared to the first quarter of this year and 42.4% compared to the second quarter, the lowest amount of successful bids in the third quarter over the past three years.

This October, Seoul Auction and K Auction, which account for about 90% of the Korean auction market size, realized a total of 8 billion KRW. In October last year, the total winning bid of the two companies was 22.5 billion KRW (15.2 billion KRW for Seoul Auction and 7.3 billion KRW for K Auction).

Many small artworks were bought and sold in October, but large masterpieces by modern and contemporary artists, which are the highlight of the auction and account for a large part of the total sales, were auctioned off without competition at a price slightly above the highest estimate or failed to sell.

Artworks such as Kim Kulim’s Yin and Yang 15-S. 33 (2015, estimated 77 million KRW to 120 million KRW) and Kwon Ok Yun’s Esprit de Bois A (1965–1968, estimated 80 million KRW to 150 million KRW) at Seoul Auction failed to find a new home. Park Seo-Bo’s Ecriture No.070118 (2007, estimated 220 million KRW to 280 million KRW) and Lee Ufan’s with Winds (1988, estimated 400 million to 600 million KRW) at K Auction didn’t sell. 

© Seoul Auction.

“The limited number of blue-chip artists, who have great economic value and represent a safe and reliable investment, and the lack of high-priced art sales are making the Korean art market hard to withstand the unstable market,” the KAAARC mentioned in the report. It also added that this downtrend is partly “due to the shrinking sales of ultra-contemporary artists (born after 1975) caused by their unstable price value.”

Other media added that the decline in the local art auction market had been attributed to a number of other factors, including the insecurity caused by global conflicts and the recession caused by increases in the international interest rate. Additionally, the fatigue in the Korean art market has persisted since the first joint show of Frieze Seoul and Kiaf SEOUL, and the frantic craze of young buyers for contemporary art is quickly cooling off.

It was also mentioned that the shutdown of Seoul Auction Hong Kong due to the COVID-19 pandemic played a significant role in the sales decline. “The absence of Seoul Auction’s Hong Kong sales resulted in a 40 billion KRW decrease compared to last year’s total sales amount,” the Korea Art Price Appraise Association mentioned.

The Chinese art market, including Hong Kong, is one of the world’s two largest art markets, and it is inevitably one of the most important markets where the Korean auction house can expect an increase in sales and where artworks by Korean artists can set new records. 

For example, when the majority of Whanki Kim’s works were listed in the top 10 most expensive artworks between the second half of 2015 and the beginning of 2019, six to seven of them were sold at Seoul Auction’s Hong Kong sales.

Seoul Auction's 33rd Hong Kong Sale Catalogue Cover Image.

The KAAARC’s art market report compared the Korean auction market’s growth rate to that of the international auction market to provide a broader understanding of its current decline. In contrast to the Korean art market, which has been severely impacted by the global economic recession, the international market has shown remarkable resilience in recent months.

Sotheby’s and Christie’s, the two mega-auction houses, recorded sales increases of 49.7% and 11.6%, respectively. According to the KAAARC’s report, high-priced art with both art historical and artistic values was the main factor in the expansion of the art market. The auction houses’ inventory lists of important collections and networks of big collectors played a big role in the global art auction market’s growth.

The increased sales of works by ultra-contemporary artists were also seen as an important factor in the expansion of the market. Due to the influx of NFT, street art, and works by female artists, the ultra-contemporary art market now accounts for 18% of global art market sales. As of 2022, the sales of these artworks reached an all-time high of $20.9 million, or 2.7% of global art auction sales.

The total sales of ultra-contemporary art increased by more than 700%, from $91.4 million in 2013 to $739.3 million in 2021. The number of auctioned works increased by approximately 250% during the sample period, from 3,487 in 2013 to 12,216 in 2021.

The KAAARC determined that ultra-contemporary artists were able to rapidly enter the mainstream market due to the increase in speculative collectors, in part because of the influence of some collectors who aggressively purchased lower-priced works by young, promising artists at auctions.

However, the center emphasized the need for a more analytical examination of whether the long-term growth of these ultra-contemporary artists can be achieved. The KAAARC provided examples of global star artists.

Since its peak in 2008, Damian Hirst’s sales have decreased by 85.9%. In the case of Hirst, too many works have been released onto the market, causing their rarity to decrease. Anselm Ryle also seems to have remained at a low level since his peak in 2008 and the subsequent 70% decline in 2009, as does Lucien Smith, who reached his peak in 2014. Akunyli Crosby has also experienced a significant drop in sales since its peak, but this is attributed to a decrease in supply rather than a drop in demand, as it was the result of limiting the number of works to be auctioned after joining David Zwirner Gallery with Victoria Miro in 2018.

Woo Kuk Won, 'Black Cat' (2020), Seoul Auction's 33rd Hong Kong Sale Catalogue © Seoul Auction and the artist.

Works by living emerging artists in Korea have also garnered considerable interest in the Korean auction market. Although it will be partly online, the news that the Seoul Auction Hong Kong auction will resume on November 29, after two years and four months of being closed, there is a great deal of interest in whether or not their works can attract attention in the Hong Kong market.

A large number of works by Korean Dansaekhwa artists such as Whanki Kim, Yoo Youngkuk, Park Seo-Bo, Ha Chong-Hyun, and Yun Hyong-keun will be included in Seoul Auction’s Hong Kong sale, as well as works by younger artists such as Woo Kuk Won, Kim Sunwoo, and Joung Young-Ju, who set records on the Korean auction market before and during the COVID-19 outbreak.

There haven’t been many studies on the significance of these younger rising stars in the Korean art market. KAAARC points out that these ultra-contemporary Korean artists will need to establish art historical and artistic values, which cannot be accomplished in a short period with auction records.

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