Israeli art market alive and kicking

If you had to guess what was the Israeli art market's turnover in the past decade, what would be your estimate?

Chagall violin painting 88 248 (photo credit: )
Chagall violin painting 88 248
(photo credit: )
If you had to guess what was the Israeli art market's turnover in the past decade, what would be your estimate? Before you read on, see what number enters your mind. Well, this may come as a surprise but the figure topped $180 million.
The passing decade brought with it important developments, such as a hike in the number of international events held here, record sales auctions and growing global recognition of Israeli art and artists.
In 2007, the Israeli art market was estimated to have reached an all-time high of $36 million (nominal prices). Though annual sales have dropped about 40% in 2008 and 2009 in wake of the global financial crisis, the 2nd half of 2009 provided signs of recovery ahead of the new decade.
With a hammer price of $643,200, Mordechai Ardon’s Timepecker holds the record for a piece by an Israeli artist. As the economy and art market continue to show signs of recovery and growth, new auction records are expected in the coming years.
Though the Israeli auction market was established somewhere in the late 80s or early 90s of the 20th century, it has since significantly evolved. During the 1990s, annual auction sales leaped from a few million dollars for a couple of hundred items sold to $12 million for nearly a thousand items sold in 1999.
The March 2000 dot-com bubble-burst triggered an economic recession. The failed Middle East peace talks resulted in the eruption of the second Intifada (Palestinian uprising), discouraging foreign investors from pouring capital into the region and further deepening the economic recession.
As in other areas, art has also suffered a sharp drop in sales. Annual turnover gradually dropped from $13 million for approximately 900 items sold in 2000 to nearly $5 million per approximately 700 items sold in 2003. Compared to the rest of the world, the Israeli art market experienced a sharper drop as global reduction in auction sales turnover was only 10% at that time.
First signs of economic recovery appeared in late 2003 and early 2004. At the time, Sotheby's Israel branch took its contemporary Israeli art sales to be auctioned in New York, providing significant exposure to Israeli art and artists. The most lucrative Israeli art auction was held in the 2nd quarter of 2006 in Sotheby’s NY, where a $6 million turnover was recorded.
Sales of Israeli art, both abroad and at home, have soared. New auction records were set and average prices, particularly at the top end of the market, jumped. Lots sold at hammer prices of $100K and higher increased by an average of 49% from 2003 until the end of 2007. For example, Mordechai Ardon’s Ascension of a Watchmaker was sold in Sotheby's Tel Aviv in 1988 for $30,800 and than resold at 2005 at Sotheby's New York for $108,000.
The highest return on an item sold in an Israeli auction house was 320% and belongs to Marc Chagall's Personnages de cirque, which was sold in 1997 for $57,500 (Christies TLV) and was resold ten years later (Christies TLV) for $240,000.
Demand for Israeli art kept rising until 2007, a year in which totalsales amounted to $36 million for 2,800 items, up eight-fold (turnover)and seven-fold (lots sold) compared to 2004. A third of total salesoriginated in Sotheby's New York Israeli art auctions.
The decade's second economic crisis would again take its toll on theart market. The sub-prime mortgage crisis first surfaced in 2007,eventually leading to a global crisis of massive proportion, affectingthe financial sectors, mainly in the US, Europe and the Easternmarkets.
The crisis, whose effects are still being felt, has sent shock wavesacross the global art market, leading to contraction of trading volumeand income. Though the meltdown's effects on the Israeli economy havebeen relatively modest, the Israeli art market has not proved to beimmune to the economic crisis. The annual turnover in 2008 dropped 37%,totaling $22 million. Global reduction in auction sales turnover wasabout 10%. 2009 auction results continued to post a 10% reductioncompared to 2008, resulting in approximately $19 million. The number oflots offered for sale decreased substantially.
The writer is an expert in the business aspect of the international art market. To read more about the subject, click here