May 28, 2021 08:08 PM

In Depth: How Young Money Is Changing Hong Kong’s Art Market


Sotheby’s senior auctioneer Ian McGinlay caught the attention of the sparsely populated hall in downtown Hong Kong, calling “Going once. Going twice!” before bringing his hammer down on French-Chinese artist Chu Teh-Chun’s “Sheng Shi Xue.”

After more than 70 bids and more than 20 minutes of stalemate bidding, there was a round of applause in the auction room. Taking into account the commission, the total transaction price of “Sheng Shi Xue” was about HK$230 million ($29.6 million), the highest transaction price of all the auctions that took place in April during Hong Kong’s heated spring season.

Sold for HK$198 million, the large snow scene in triptych went for about three times its guide price of between HK$80 million and HK$120 million to a phone-in client.

In the art world, the first round of spring auctions in Hong Kong is taken as a bellwether for the Asian market. This year, contemporary art was booming, with young Chinese collectors with an international outlook leading the trend.

Pandemic slump

Last year Hong Kong’s art museums, galleries and exhibition spaces shut their doors as part of efforts to control the virus, and an art market worth hundreds of millions swiftly shut down. Most auction houses in Hong Kong postponed or cancelled their events.

Globally, art sales in 2020 fell an estimated 22% year-on-year to $50.1 billion, setting an all new low, and at auction global turnover was around 113 billion yuan ($17.6 billion), a decline of 30% on 2019 according to a report by Art Basel and UBS.

Subject to pandemic travel restrictions, mainland and overseas visitors to Hong Kong are at an all-time low. Even teams in Hong Kong can’t easily view the lots, but the internet has helped. Auction venues are only open to actual bidders, and online live broadcasts and bidding make up the bulk of business.

Nevertheless, things are improving. Awash in capital globally, the auction market has shot forward along with stock and property. Among the 10 pieces exceeding 100 million yuan in Hong Kong this season, nine came from Sotheby’s and one was sold by Poly Auction Hong Kong.

Poly Auction, owned by the entertainment subsidiary of sprawling Chinese state-owned materiel giant Poly Group Corp., was forced to cancel its auctions of Chinese antiques, paintings and calligraphy last year, and postpone its other spring auctions, due to the impact of the epidemic.

This year, its Hong Kong spring auction went ahead as scheduled, with a total turnover of more than HKD$700 million, but it was still down more than 20% on 2019 before the virus struck.

Zhang Yixiu, executive director of Poly Auction Hong Kong, said that liquidity is increasing. Everyone in the art investment market is trying to preserve their assets. With low interest rates post pandemic, buyers are more enthusiastic than ever, but prefer safe bets over wilder acquisitions.

The Art Basel UBS Art Market in 2021 report surveyed 2,569 high-net-worth collectors in 10 markets including the United States, the United Kingdom, the Chinese mainland and Hong Kong, 66% of whom said the coronavirus would make them buy more art rather than less. 57% were planning to enrich their collections and 35% were considering putting works on the market in the near future.

Guo Dongjie, head of modern art at Sotheby’s Asia, says its “survival of the fittest.” The works of top masters are the focus of the market. “The best pieces in the art market are seeing their prices get stronger.”

Guo revealed that its spring auctions in 2021 earned HK$3.85 billion, the second highest ever for the auction house in Asia. The auction of “Sheng Shi Xue” was one of Chu Teh-Chun’s most intense in the past decade, with bids coming in from four different regions. The final buyer was a Chinese collector.

China Guardian (Hong Kong) hosts auctions at the Hong Kong Convention and Exhibition Centre every year, on average bringing in more than HK$500 million. This quarter’s turnover was HK$364 million. Hu Yanyan, the auction house’s president, named by Financial Times as one of the five most powerful women in Asia’s art world said, “In the long run, the next five to ten years will be a golden period for the development of the art market.”

Modern twist

But contemporary art is making a growing mark. This year’s Guardian Hong Kong spring auction was mainly attended by online bidders and the highest-priced sale, that of Yoshitomo Nara’s “Sprout,” came from one of 4,000 of them.

The work of the eccentric 62-year-old Japanese artist, described in a Christie’s catalog as straddling “infantile imagination, adult anxiety, and ageless rebellion” brought in huge sums this spring.

The guide price for “Frog Girl” was between HK$40 million and HK$80 million. That is to say, its sale price on May 12 was about 20% more than the highest price expected. For now, it is Nara’s third most expensive work. “House Installation” and “Two Paintings” also went for record figures.

Sotheby’s data shows that the total estimated value of this spring’s auctions for modern art ranged from HK$1.5 billion to HK$2.2 billion, and final turnover exceeded pre-sale valuation, reaching HK$2.25 billion, accounting for 58% of the total spring auction turnover.

Old and new

“The (art) market is hot,” said Chen Xiao (pseudonym), a middle-aged partner at a large private equity firm. “Since the epidemic last year, many auctions have exceeded expectations.”

Unmoved by contemporary art, Chen prefers the classics. Chinese painting and calligraphy are his forte, along with Western impressionist oil paintings. He cares about the artistic value of the work — and its ability to hold value. “It is certainly not as quick as the stock market, and the liquidity is not as good, but it can play a role in diversifying risks.”

It’s also helped expand his social circle. “A lot of people play with their cars and yachts, but they’re not unique. There is only one (of a) painting. If I have it, you don’t. You may have more expensive ones, but you don’t have this one,” he said.

Poly Auction’s Zhang is more pragmatic. “I bought Monet and Picasso 10 years ago, and now they’re the same price,” he said bluntly.

Collectors of Chen’s vintage are slowly being supplanted, including by young collectors from the Chinese mainland. “Regardless of the category, everyone must accept the reality that (millennials) will definitely play an increasingly important role in the art market in the future. It’s an obvious trend,” said Sotheby’s Guo.

In the global art market, younger collectors are unstoppable. According to UBS and Art Basel, of the 18% of surveyed collectors that spent more than $1 million on art in 2020, 63% were millennials.

The latest data from Sotheby’s shows that more than 30% of bidders and buyers are young collectors under the age of 40. The CEO of Christie’s, Guillaume Cerutti, said that the influx of millennial buyers made him optimistic about the art market in 2021.

The buyer of Nara’s “Knife Behind Back”, who handed over HK$195 million, for the painting was under 30.

“What the market lacks now is really great works, but there is no shortage of money,” said Zhang.

Contact reporters Heather Mowbray ( and editor Flynn Murphy ( 

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