Korean Art Market Threatened by Speculative Intentions

With the Korean art auction market setting the highest bid price record auction after auction recently, many in the art circles have raised concerns over the consequences of an overheated art market.

The oil painting “A Wash Place” by the late Korean artist Park Soo-keun was sold for 4.52 billion won at the Seoul Auction Space in Pyeongchang-dong, Seoul. It was the highest local price for a single piece of Korean art. It was only two moths ago when his other famed painting “Women at the Market” recorded the highest bid at 2.5 billion won. Kim Whan-ki’s painting “Flower and Jar” was sold for 3.05 billion won, fetching the highest price among his artworks. Another piece by Kim, “15-XII 72 #305 New York” which reappeared in the auction market in March, was sold for 1 billion won, surpassing its previous price of 390 million won in 2000.

Record-high bids for artworks are not limited to Park and Kim. More and more bidders are willing to pay high prices for artworks created by relatively young artists in their 20s and 30s.

“Busan Scenery,” by 27-year-old Choi So-young, received a bid of 57 million won, well above the Seoul Auction Space’s estimate of 10 to 15 million won. The artist, also known as “the artist in jeans,” used cut-out pieces of blue jeans for the artwork. Ahn Seong-ha’s “Candy” was also sold for 25 million won, five times more than the expected bid. The piece by the 30-year-old was praised for its realistic depiction of candy inside a cup.

As more art auction markets value young artists’ art as an attractive investment, galleries and art collectors are fiercely competing with each other to get them.

A curator in a gallery located at Pyeongchang-dong said, “These days, major galleries in Korea try to buy as many pieces created by young artists as possible. They are now enjoying their increasing popularity.” At the end of last year, heads of major art galleries even took the trouble to attend a graduation exhibition at Hongik University art school to secure more young art pieces. A graduate at the exhibition was astonished at the different mix of visitors and remarked, “It was usually only friends and family members that comprised most of the visitors three or four years ago.”

According to the Galleries Association of Korea, the total volume of last year’s art market was estimated at approximately 300 billion won. Although optimists say market expansion will lay firm ground for Korean art, others have voiced concern that the latest frenzy is simply too much.

An indication is that the price hike is only confined to the artworks of a few artists regardless of their fame and experience. Those in the art circles pointed out that artworks of only about 30 artists, including Lee Dae-won, Goh Yeong-hoon, Bae Byeong-woo, and Sa Seok-won, have been valued at extremely high prices. Furthermore, 90 percent of trade in the art market is mainly transactions of their pieces.

The sudden rise in prices of and demand for artwork is more apparent for those created by younger artists. Gaining uncontested popularity at Christie’s in Hong Kong in 2004, Choi So-young’s pieces are regarded almost as equally as valuable as pieces from other well-established artists.

Chung Jun-mo, a 50-year-old art critic, said, “The recent price hike reflects investors’ speculative intentions. More people are buying artwork because of their investment value, and not because they truly appreciate it.” He further added, “These buyers make bidding only based on rumors and how much a certain artwork piece was valued at in foreign auction houses. As a result, the prices of a limited few are defying gravity.”

nuk@donga.com