BlogMay 20, 2011

Few Surprises at Canadian Auction, but Critical Questions for Sellers

Vancouver auction review

On Tuesday night in Vancouver, Eric, Alan and I attended the first of the major spring auctions of important Canadian art. There were few surprises. Post-war and contemporary art continued to receive ever-more attention, however, the somewhat erratic participation of novice buyers and speculators was reflected in unpredictable bidding and sometimes seemingly indiscriminate buying. The market for old master, impressionist and modern Canadian art showed tremendous depth, and the prices reflected their temporary over abundance and an uneven quality of artwork by certain artists.

Post-War and Contemporary

Our recent private sales of important paintings by Jean Paul Lemieux, William Kurelek and Jean McEwen accurately illustrate the strength of the market for paintings by these artists witnessed in Tuesday’s sale. Here at the gallery we are in the process of acquiring outstanding works by the great, self-taught expressionist Sam Borenstein. His is a market continues to enjoy success. His strong use of colour and vigorous brushwork appeal to today’s collectors in search of artwork with an instant impact. “Street Scene” sold for $46,800, with the auctioneer’s premiums. It was a solid price for a work of its size and, in our opinion, also a good buy. We encourage serious collectors in search of great paintings by Borenstein to contact us.

In some exceptional cases, the availability of supply did not appear to hamper sales. One of the evening’s few surprises was Gordon Smith’s abstracted landscape “W.F.3”. Painted only 6 years ago, in 2005, it sold for a hammer price of $120,000, a figure that supersedes prices paid for some of the finest paintings by the artists of the Automatiste movement, Painters 11 and many great early 20th century painters. It seemed characteristic of the market for works by artists with a focus on Western Canada, on a day when paintings by B.C. Binning and E.J. Hughes also achieved solid prices. Obtaining a sense of relative values that would suggest a stable and informed marketplace was difficult. Importance (size), and other traditional variables did not always appear to consistently affect purchase prices. Selectively, smaller paintings by Jean-Paul Riopelle and Paul-Emile Borduas did quite well, whereas their larger counterparts failed to exceed the expectations suggested by their estimates.

Old Master, Impressionist and Modern

The fine art section of the sale, featuring Canadian old master, impressionist and modern artworks from the pre-WWII era, was characterized by a lack of diversity in the works on offer, an abundance of supply of work by the artists represented, and the general absence of true masterpieces. The depth of the market helped produce a strong aggregate sale total and most of the works were sold but it also raised critical questions about expectations for future sellers. Artwork by 13 artists accounted for 64 (or 80%) of the 81 lots offered for sale.

In fact, the fine art sale featured work by only 27 artists. We have previously explained that selective bidding and erratic prices are characteristics of a market where there is too much supply in a short period of time. Of the thirteen A.Y. Jacksons offered for sale in the two hour sale of fine art, all but one sold, most of them to different buyers. It is a testament to the tremendous depth of the market for Jackson paintings, however, the dispersal of buyer interest across such a large number of works resulted in a great deal of inexplicable and mediocre prices. The greatest surprise of the auction might have been the sale of a somewhat uncharacteristic 1944 Jackson canvas, which sold for a hammer price of $410,000, among the highest prices paid at auction for one of this iconic artist's paintings.

The saturation of works by artists featured in Tuesday's sale meant that consignors stood little chance of netting record prices. Where there was quality, scarcity and a recognizable name, excellent prices followed. The exceptional Horatio Walker “The Ice Cutter, Ile d’Orleans”, the painting used by the artist to produce a major canvas in the Montreal Museum of Fine Arts, was hammered down at $75,000, the only auction record price achieved in the fine art sale. We have expounded numerous times the new difficulties of buying artwork at auction for re-sale. The facility of retrieving the history through internet records fetters saleability in a market where buyer preference is for “fresh” works. The same is true for paintings back on the block after only a short time.

The F.H. Varley “Fire Ranger’s Look-Out” was knocked down at $130,000, slightly above the low estimate of $125,000. When last offered publicly in November 2008, the painting was unsold with an estimate of $175,000 – $225,000. After the auctioneer’s normal selling commission, the consignor should net just under $117,000 for this painting by a founding member of the Group of Seven, well below their original expectations.

Overall, there were few surprises in the first of the spring Canadian art auctions. With only occasional exceptions, where there was quality and scarcity, the market showed strength. Conversely, where there was mediocrity or a temporary oversupply of similar works, the results were at best unpredictable, sometimes mediocre, and in other instances the works were simply unsold. Collectors appeared to gravitate to works that had strong contrasts and striking colours. Small works generally fared well when not handicapped by an abundance of supply, as evidenced by the prices paid for a small McEwen, two small Kureleks and the Walker.

By contrast, when it came to larger works, collectors sought “wall power”, to use the trendy idiom. Paintings with a recent auction sale history, whether that be sold or unsold, presented astute buying opportunities, but perhaps not the returns that sellers aspired to. As my father hinted at in his post-sale analysis, this is a brave new world for auction sellers and buyers alike. The abundant supply of works by certain artists that are offered for sale at auction every six months is the result of competing auction houses, each seeking to out-do the others and claim the highest aggregate sale total. The latter is often the centerpiece of the post-auction press-release. If one house were to decline to take on too many similar works, a competing sales room is likely to accept the balance and optimistically add the selling price (should it sell) to its total. This should raise questions for prospective sellers, whose primary interest is what they net for the work(s) they own. Primarily, what should they expect to net?

How can the value of their paintings be accurately projected or protected under the temporary conditions of supply imposed during auction season? The competition for higher aggregate sale totals is almost entirely at their risk. The final question, or suggestion, is this: Those considering the sale of important paintings by the artists of the Automatiste movement, Group of Seven, Beaver Hall Group, Jean Paul Lemieux and others, who are seeking to minimize risk and protect the value of their precious works of art, may be better served in a well-managed, private sale environment.