The main drivers of the German art market [08/28/2003]

Germany has a unique place in the art market. High volumes in segments where prices are below EUR 10,000 have meant a higher degree of democratisation than anywhere else. The premium market, meanwhile, is limited to expressionist paintings.

Germany’s share of the world art market has remained flat for a number of years, and stood at around 13.5% of sales by volume and 3% by value in 2002. However, faced with the current economic downturn, German art collectors have become somewhat more cautious, and the no-sales ratio has risen significantly over the last three years, from 41% in 1999 to 51% in 2003. Remember that the worldwide buy-in rate was only 37% in 2002.
However, prices remain below those of markets elsewhere. In the first half of 2003, the average lot price (arithmetical average) in Germany was EUR 4,000, ten times lower than in the US (see ArtMarketInsight of July 11, 2003). But although 95% of works sold in Germany change hands for less than EUR 10,000, that is in line with the market structure. A far higher proportion of prints and photographs is sold in Germany than on other markets. These works represent just under 22% of worldwide transactions, against 42% in Germany.
Regardless of category, modern works are particularly popular in Germany, with artists born between 1860 and 1939 accounting for 66.4% of sales.

Although many view the German contemporary market as one of the most buoyant, these works still make up just 5% of volume sales, whereas contemporary artists account for almost 7% of the worldwide market. Paradoxically though, German contemporary artists are extremely sought after: Andreas Gursky, Blinky Palermo, Anselm Kiefer and Sigmar Polke have already sold works for over USD 500,000. They now number among the 20 most expensive artists born after 1940 (see ArtMarketInsight of June 18, 2003). However, their best pieces are no longer to be found in Berlin, Munich or Cologne but in London or New York, where they are fetching top prices.
But while contemporary art is more popular in other countries, modern works sell very well in Germany. The artists generating the largest turnover are the expressionists of the die Brücke group, such as Emil Hansen Nolde, Hermann Max Pechstein, Karl Schmidt-Rottluff and Erich Heckel. We have to say that German expressionists are very popular indeed. The rise in turnover generated by these artists’ works is a direct result of the sharp increase in their prices (see ArtMarketInsight of January 22, 2003). In 2002, a number of lucrative sales, such as the EUR 1.65 million paid at Villa Grisebach on 7 June for Hülltaft Hof (1932), made Emil Hansen Nolde the market leader in 2002.

The best works are sold at Lempertz, Villa Grisebach, Ketterer and Hauswedell & Nolde: unlike in other countries, no single location holds a monopoly on the German market. This highly regionalised structure makes for lively competition between German auction houses. Prestigious sales also take place in Cologne, Berlin, Munich, Stuttgart and Hamburg. Note though that neither Christie’s nor Sotheby’s have set up operations in Germany. With 29% of the market, Berlin hosts the most prestigious sales, such as the auctions at Villa Grisebach on 7 June 2002 (EUR 8.9 million) and 30 May 2003 (EUR 4.1 million).

German art market: auction sales turnover (1997- 2002)

(Euros Million)

2002 German art market

2002 German art market

2002 German art market : Top 10 best selling artist

Annual ranking of artists by auction turnover

German ar market: Top 10 auction records 2002