Selling Chinese Antiques, Right Now Might Be The Smart Move
Selling Chinese Antiques or any other form of art easily and profitably is about timing based on "Market Conditions". Art markets are highly sensitive to economies, in particular economies that most influence prices. So from here forward we of course are talking about China.
So, how are things in the Chinese art market? Not great, but not terrible.
While highly desirable true rarities will always find a buyer, indicators are, going forward I doubt prices of just a couple years ago will be sustained. In other words the days of the 36 million dollar 2.5 inch cup may be over. (likely over)
Note: If attempting to sell your own Asian and Chinese antiques isn’t something you want to do, contact us.
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Values of Art and Antiques Can Go Down
Contrary to what many folks think, art and antiques can go down in value, they can even plummet. Just ask any collector of "American Antiques" how they've done in the last 10 to 12 years. Prices have declined by as much as 80% from their staggering highs of the 1990's. How's the Japanese art and antiques market? It collapsed 20 years ago and has never come back. So, do not think for a minute antiques cannot fall and cease increasing in value or even go down in value. Antiques are not immune to price volatility any less than stocks or real estate.
Fortunately, so far this does not appear to be the case with Chinese antiques. Weaknesses are appearing none the less.
Starting in 2013 a considerable amount of "selectivity" began in the market. Most evident in particular with jades and mid range porcelains. Common small 18th and 19th C. jades that had been rising in values suddenly slowed and began going unsold. Auctions in New York, London and Hong Kong have all been affected. This past fall several well known auction houses were selling jades in "lots" of two to six pieces at a time. Chinese porcelains that had once made it into a Christie's sale, are now relegated to the second and third tier auctions houses and doing "ok", but nothing to write home about.
Rising Values Are Driven By Economic Confidence of Higher Prices Later
China's Art Market's Economic Problems in a Nutshell, It started in late 2012
By all indications the current boom cycle of the last 20 years of ever higher prices for Chinese art is slowly ending. It actually started a couple years ago. Initially the Chinese government had been able make adjustments to stave off declines. Today everyone knows China's economic growth has of course slowed. Uncertainty now flows from their stock market on a daily basis, despite the government's efforts to stem the hemorrhaging. Today confidence in the Chinese government's ability to hold back a sell-off through currency manipulation has waned.
China's annual economic growth targets of 8% to 9% are for forecasts no longer sustainable as global product demand weakens. (ripple effect) Expectations are China's GDP growth will fall back by at least 25%, which is very bad news for China. China's huge population and revenue needs for modernization are substantial. Doing so while providing the required services this kind of slide will be painful and disturbing for the Chinese people. Despite China's vast wealth in the hands of some, most Chinese citizen still live on a couple dollars a day.
China's economic slowdown is now having naturally the opposite effect it had on the art market when things we're flourishing. The demand that had been instrumental in pushing the rise of Chinese antiques prices is tied insepar
ably to their growingly problematic economy. China is not alone. Australia, a major Chinese trading partner are heading towards a Bear Market, ditto for Japan.
Raw Materials, Mines , Economic Downturns and Chinese Antiques
Demand for 'raw materials" is a good barometer of how things are in China. Values of global mining stocks for the last couple years have reflected a lack of demand resulting in large drops in stock prices for Rio Tinto, BHP Billiton and Glencore. Each losing 60 to 80% of their value in the last couple years. These changes should give you a heads up when countries like China who are economically dependent on manufacturing are probably heading into trouble. The EU's own economy isn't great either with the Euro dropping nearly 25% in the last couple years where GDP growth has bee very sluggish.
Energy demand is also not keeping up with supply resulting in massive drops in oil, now in the $30 BBL range.
Will The Chinese Antiques Market Collapse Like Japan's Did?
Selling Chinese antiques in the future at the record prices of a couple years ago are clearly over for now. This past fall, the major auction houses saw overall lower results and reduced interest from one time "sky is the limit" buyers. Many didn't bother attending the sales at all. While the top of the market of the great-great rarities will always find a buyer. I doubt they'll be smashing records at their previous rates. Prices have and will continue to slowly soften, in the middle market particularly. I doubt we'll see a free fall collapse as we all saw with Japan, though the Chinese are diving into the modern and western art market. So you cannot rule out a hard collapse of prices if any type of panic sets in. Due to China's prohibition on the export of Chinese antiques in most categories, it's very hard to predict just what a sell off might look like.
Chinese Art Collectors Are Shifting Focus
Another shift indicator has been the increase in purchases of western art by wealthy Chinese connoisseurs including Modern art. Last fall the famous Chinese billionaire Liu Yiqian who had previously bought the 35 million dollar cup (see above) spent a whopping $170,000,000 on a Modigliani. While Chinese antiques values rely heavily on demand from mainland Chinese collectors, American Modern and French Impressionist art is a global market. This market is supported by wealthy collectors in America, South America and Europe. It's a smart move economically and will be a good investment hedge if Chinese antiques take a dip or dive at some point.
Other wealthy Chinese collectors have also invested heavily in western art recently. China's Wang Jianlin recently spent $20,000,000 on a Monet and media owner Wang Zhongjun bought a Picasso for $30,000,000. How much these changes will additionally impact the Chinese antiques market is unknown. However, these dollars going to an entirely different category of collecting will and has impacted things.
Is Now the Best Time To Be Selling Chinese Antiques ?
Two Answers: If you're a collector who loves Chinese art and get hours of pleasure from it and do not need the money, absolutely not. Collect, learn and enjoy. You will probably getting some comparatively great buys in the coming next few years. Now is not the time to be selling Chinese antiques as long as you still enjoy them. You do have to accept the idea they may slip a bit in value or might not rise for a few years.
If however you're an heir to a collection or have been thinking about selling your own collection to finance your retirement I would suggest you started sooner rather than later. I can see little to no UPSIDE in prices for quite a while for all of the reasons mentioned above. Most economic cycles in my lifetime seem to go in 8 to 14 year ups and downs. Right now the DOW has doubled in the last 8 years and has been stalling into a correction. Selling Chinese antiques into a still strong albeit wobbly market is better done sooner rather than later. If you have been holding hoping for higher prices I think it's over fpr now.
Right now the market is still pretty receptive, but (there's always a BUT) , predicting what's on tap for China, the EU, Middle East, the USA post 2016 election is all a gray area.
Thinking of selling your Chinese Antiques or Asian Art ? Let us know, we're always here.