Bubble prices a crouching tiger for local art market, association head says

“Serenity” was placed in auction Nov. 27 by Antik A.Ş for $9 million opening price; however, the price increase the painting received in the course of the auction reached only $9.1 million, according to media reports. Prior to the auction, Antik A.Ş announced at a press release that they had signed a $10 million insurance policy for the work.

Auctioneer Turgay Artam withdrew the painting from the auction because the price offer was below the insurance price, which shows the sales price the auction house expects to receive. He announced during the auction that the painting received a higher price offer, without disclosing the identity of the bidder.

Hürriyet Daily News asked one company representative through email correspondence whether this anonymous bidder submitted the price offer before the auction and why he or she abstained from participating in the auction instead. The representative said in his response “the work that was put to sale at a price range between $9 million and $10 million would be sold only at a price within this price range provided that the owners also gave their consents to the sale. However, the bidder asked for long-term payment, therefore the sales decision could not be made on the spot and the sale was delayed.”

According to Artam’s announcement during the auction, the mentioned bidder wanted to pay for the painting with installments, and the auction house had to consult with the present owner of the painting before concluding the sale. The painting is currently owned by the heirs of late İsmail Cem, former foreign minister and parliamentary member. According to daily Radikal’s report, Antik A.Ş representatives said there would be more buyers competing for the purchase of the painting provided that the family gives their consent to alternative payment methods. The family rejected actualizing the sale so far as they did not receive a satisfactory price offer, representatives said.

Doğan Paksoy, owner of Teşvikiye Art Gallery and chairman of the Turkish Art Galleries’ Association, told Daily News that “Serenity” was overpriced and it was very normal that it could not find a buyer. “I do not believe that there is a secret buyer interested in the painting. I think they are just trying to heat up the competition.”

He said the auction house did not intend to sell the painting but was solely after increasing the prices of Osman Hamdi Bey works. “If the price set for a painting is $10 million you would consent to sell it for $9.1 million, there is not much difference. It is strange that they did not. My opinion is they have other Osman Hamdi Bey works in their collection and they will put them on sale in the future and now they are pulling up the artist price level.”

Recalling that the artist’s “Lady of Constantinople” was sold at record-breaking $6.9 million in 2008 at a London auction by Sotheby’s, Paksoy said that after the price announced at the Antik A.Ş auction the minimum price for any Osman Hamdi Bey work was increased from $6.9 million to $10 million. “This is an artificial increase; this is what finance and economy experts call bubble pricing. In the long run this is detrimental to Osman Hamdi Bey’s works’ value, because now the price is pushed up to $10 million but the sale was not actualized. You cannot sell the painting for $10 million anymore. You have to slash the price. And in the next auction Osman Hamdi Bey, our bestselling painter, will have depleted its value and this also will have ramifications for the overall Turkish art market. “

Paksoy also said he had a friend who has an Osman Hamdi Bey work in his collection. “He wanted to sell it. This work is twice as big as ‘Serenity,’ and it has 17 or 18 human figures in it. We did not even think of demanding $10 million for that work. Who will buy Osman Hamdi Bey? ‘Lady of Constantinople’ was sold in London, but it was bought by a Turkish collector. Let’s face it, only a Turkish collector will buy an Osman Hamdi painting and no Turkish collector could or would pay $10 million for ‘Serenity.’”