Artprice Index surges in first quarter of 2004

The most recent Artprice Index update bears out the strong performance of the market.
Having risen in autumn/winter 2003, dollar-denominated canvas prices are continuing to accelerate, up 3% in the first quarter of 2004. Values also improved in euro terms, although less impressively at +1% in the first three months of the year. Figures of this kind are clear confirmation that a sizeable recovery is underway, as already indicated by higher trading volumes and a fall in the number of bought-ins (see AMI of 14 April 2004).

After underperforming the euro index for almost three years, the dollar-denominated art market index has taken just a few months to regain ground, thanks to the rapid depreciation of the greenback and the US economic revival. New York’s auction rooms are seeing brisk trading and some hard-fought sales. While the Artprice Index of paintings advanced 11% in dollar terms between January 2003 and April 2004, the corresponding euro indicator grew by just 1.7%. With the art market reflecting the momentum of the economy as a whole, Europe is on the right tracks but making little headway compared with the soar-away US economic recovery. All the same, the recent narrowing of the euro/dollar disparity should, if it continues, see the dynamism of the US art market spread to Europe.

Over a ten-year period, a dollar investment in artworks looks far and away more profitable than a euro investment. Scarcely 12 months ago, the situation was the reverse. USD 100 invested in a painting in 1994 would be worth an average of USD 118 in April 2004.But prices being set in New York, London and Paris remain well below where they were in 1990, just before the speculative bubble burst, so there is still plenty of upside potential.