And the ballroom dancers went around… and around… and around again. A lesson in reading auction figures.

6 03 2013

John Brack, ‘Backs and Fronts’ (image via

Hello, old friend. Nice to see you again.

It’s good to know some things never change. As regular as clockwork… John Brack’s Backs and Fronts is back on the auction podium for the fourth time in nine years. Wouldn’t be the first, and certainly won’t be the last rapid-fire repeat customer in the Australian art auction world. But I’ve grown particularly fond of this one over the years. Not to mention, those pirouetting figures offer a lovely analogy for the way this painting keeps spinning back and forth through the auction market.

I had a glance back over the painting’s auction record, and it reminded me of an object (or, perhaps ‘abject’) lesson to take on board when looking at reported prices. Thankfully, the Australian Art Sales Digest now publishes hammer prices (the price that the auctioneer calls out at the fall of hammer), not just prices realised (hammer price plus buyer’s premium), which thankfully makes the following exercise much easier.

When many people look at auction prices, (such as the prices for Backs and Fronts over the years laid out in the table below), they simply compare the prices in each column. So, for example, you’d be thinking… “hmm… The painting sold for $1,700,000 in 2007, then $1,800,000 in 2010. Given the whole GFC/collapse of the art market thingy, that’s not too shabby in terms of a return, really, is it? At least they didn’t lose any money.”

Sale date Hammer price Price incl. premium
25/11/1997 (Christie’s) $215,000 $239,000
10/3/2004 (Deutscher-Menzies) $392,290 $470,750
13/6/2007 (Deutscher-Menzies) $1,700,000 $2,040,000
24/6/2010 (Menzies) $1,800,000 $2,160,000
21/3/2013 (Menzies) (yet to be offered) estimate: $1,400,000-1,800,000

Above figures from Australian Art Sales Digest:

But herein lies the problem with that approach. The question you should really be asking is: “what did it cost the buyer to acquire the painting, and what did they recoup when it was sold?” To work that out, you need to first look in the ‘price including premium column’ – that is the total amount the buyer would have had to pay to acquire the artwork. So in 2007, for example, the buyer ponied up $2,040,000 to get their mitts on Backs and Fronts. Then, you need to look at the ‘hammer price’ in 2010 – $1,800,000 – and subtract a good chunk of that amount to account for estimated selling costs (commission, insurance, illustration and cataloguing fees). Let’s make that a round (and fairly modest) 15%.

So when the person who bought the painting in 2007 sold it in 2010 the net amount heading their way would be ($1,800,000 – 15%) = $1,530,000.

Instead of what appears to be a slight rise in value from $1,700,000 to $1,800,000, we now have a fairly dramatic loss – $2,040,000 outlay becomes $1,530,000.

Not so rosy now. And that doesn’t even take into account the effects of adjusting for inflation.

So what does that tell us about the upcoming reappearance of our spinning ladies and gents at auction? Well, the low-end of the 2013 estimate is $1,400,000. That means the reserve price must be equal to, or fall below, $1,400,000. Let’s take the 15% selling costs from that figure… that gives us $1,190,000 ($1,400,000 – 15%). That is the net amount the seller will pocket if the painting sells at its reserve (conservative, because it presumes a reserve at $1,400,000 – it could be lower).

Meaning? The person who spent $2,160,000 for Backs and Fronts in 2010 (the price including premium paid that year) is now happy to sell it for $1,190,000.

(Apologies for the shouty caps that follow…)

That’s right… THEY PAID $2,160,000 AND ARE HAPPY TO SELL IT FOR $1,190,000.


Try spinning that.


Hurty Art Market Fact #4: Contrary to popular belief, art does not always go up in value.

29 10 2010

Prompted by a comment left by Megan (another Megan – not ‘Meaghan’ me – too many Meaghans spoil the broth) on an earlier post, I decided to undertake a little exercise to test whether her very generous assessment of my prophetic skills was on the money, so to speak. Because, as much as I’m delighted to accept random and baseless compliments, I do like to test whether said flattery is justified.

One of the many things I looked at in my PhD was repeat sales of artworks at auction, to determine price movements for particular artists. It was fun. What can I say? I have a strange attraction to Excel spreadsheets and formulae – something my year 12 mathematics teacher would likely find surprising. Nowadays, I still keep a close eye on the things that pass through auction in Australia, and my ongoing research interest is in tracking and documenting the crazy alchemy that turns art into money. One of my conclusions is that there is absolutely no guarantee that a work of art bought at auction will rise in value, and sudden and rather dramatic drops in price are not at all uncommon. In the case of an artwork acquired from a commercial gallery, the likelihood of it increasing in value is minute.

But back to Megan’s assessment. I decided it was high time I revisited some of my old friends – artists whose prices skyrocketed during the art market boom that ran from 1998/9 to 2007. Below is a chart that shows a few repeat sales of the same artworks by some of the boom’s biggest hitters. To explain the figures – I started with the hammer price plus premium, which is presumably the total price paid by a buyer to the auction house for that painting. Then, I adjusted that amount, compounding annually, to account for inflation, working out the adjusted value of the original purchase price for the year in which the painting next appeared at auction. Next, I estimated the net amount that went to the seller at the second auction appearance. This amount is the hammer price, less an estimated 15% seller’s commission. I then worked out the difference between the adjusted purchase price and the net amount that went to the seller. Using the first example from the chart to explain this further, somebody paid a total of $2,040,000 for Brack’s Backs and Fronts in 2007. When that person sold it in 2010, they netted $1,530,000. Once you take into account the effect of inflation on the 2007 purchase price, this amounts to an adjusted, real loss of $774,968. Ouch. In the case of the John Olsen painting, The Afternoon Walk, it was resold three times between 2003 and 2009, registering a significant loss each time. Ouch, ouch, ouch. Oh, all these sales took place at one or more of the Menzies branches.

Yes, we are in the midst of a global financial maelstrom. Yes, under those conditions we would expect to see the value of many investments fall, particularly those that were acquired at the height of the boom. Still… Ouch!

Breaking News: John Brack’s ‘The Bar’ headed for the NGV – for reals this time.

19 03 2009



In exciting news for Melbournian art-lovers, it seems that the glowering cumulonimbus cloud that is the economic crisis may have a sterling silver lining.

We have been suffering a case of severely bruised pride since 2006, when cultural crusader David Walsh pipped NGV director Gerard Vaughan at the post, acquiring John Brack’s seminal painting, ‘The Bar‘ for the record price of $3,120,000 at auction.

In ‘The Bar‘, Brack’s reinterpreted Edouard Manet’s ‘A Bar at the Folies-Bergère‘ and constructed a typically bleak picture of 1950s Australian culture. It is a companion piece to one of the NGV’s best-loved and most iconic Australian paintings, ‘Collins Street, 5 p.m.‘ Needless to say, when ‘The Bar‘ came onto the market, the NGV wanted it. Badly. But so did Walsh who, I have always suspected, saw the acquisition of the painting as a mighty fine way of rustling up publicity for his monumental private gallery, MONA (Museum of Old and New Art). It is hard to see how the painting fits into Walsh’s premise for his collection, which is organised around the twin themes of sex and death. That said, the drinkers at the bar do look somewhat cadaverous.

Notwithstanding Walsh’s reasons for acquiring the painting, to add insult to injury since the sale the painting has been taunting us; hanging at the NGV, side-by-side with its sister piece. Walsh graciously loaned the painting to the gallery while he finished building his cultural ark across Bass Strait. Its display in Australia’s most prominent public gallery can’t have hurt the painting’s lustre (or its provenance). I imagine it would have saved Walsh a bit in insurance costs over the last couple of years, too. But, I’m clearly just a bit bitter and cynical. Walsh is using his vast wealth to construct a major collection of international and Australian art that will be open to the public – what is there not to love in that? It’s just that he TOOK OUR PAINTING FROM US!

I digress. The good news is that we’re getting to keep it… really, truly. Walsh has sold/is selling ‘The Bar‘ to the NGV! (**golf clap**). The implication from the report I just heard on ABC radio was that it was a decision predicated by financial factors. Given the reportedly legendary scale of Walsh’s online gambling operation  this sounds unlikely. 

Who cares? ‘The Bar‘ is ours. And, Gerard Vaughan? The first round’s on you.

Image:  ‘Australian Art Sales Digest’