Art prices have come to a standstill after a five-year long rise. The price index for Post-war and Contemporary art rose by only 2 percent in 2015, after skyrocketing by 110 percent between 2010 and 2014, according to the manager magazin art index by Roman Kräussl, an economist at the Luxembourg School of Finance. "The art market boom is over", says Kräussl, an expert for Alternative Investments. Prices for art market darlings born after 1970 decreased by 10 percent last year.
This had been the most sought-after art market segment during the boom, showing a price increase of 284 percent between 2009 and 2014, more than any other category. Impressionist and Modern art prices are also stagnating with only a negligible increase of 3 percent last year.
There are signs for an impending price correction in the broader art market. "Post-war and Contemporary art is even more overvalued than in 2014", warns Kräussl. The current overvaluation of Post-war and Contemporary art is stronger than the one before the financial crisis in 2008, according to a bubble indicator based on long-term price trends. It is almost as extreme as the overvaluation of Impressionist and Modern art in 1990 that was followed by a price crash of more than 50 percent when the Japanese property and equity bubbles burst. It took 15 years for prices to recover to their 1990 levels. For the first time since 1990, Impressionist and Modern art is strongly overvalued again today.
A further indicator for a bursting of the speculative bubble is the shrinking art market: Auction sales for Post-war and Contemporary art have fallen by 24 percent in 2015.