In March, the World Bank predicted that East Asian and Pacific economies would grow more than it previously estimated, due to a “sharp rebound in activities in China, noting that the region hasn’t been affected by global banking stresses.” On 13 April, CNBC reported that Asia-Pacific markets were lower on Thursday, following official meeting minutes that indicated Fed officials foresee the U.S. economy going into recession thanks to the current banking crisis, and likely to be affected.

Nonetheless, international auction houses remain focused on expanding their presence in Asia, specifically focusing on countries with inherently large, longstanding collector bases such as China and Indonesia, in a bid to ensure that art buying will continue even during a recession or the next pandemic.

After all, the pandemic sent bored wealthy people in lockdown to outbid one another via online auctions, with Asian art buyers making up 31 percent of Christie’s global sales, 36 percent of Phillips’ global spend, and 46 percent of lots sold for more than US$5 million at Sotheby’s in 2021.

It is not the least bit surprising that just last month, as the art world turned its fickle gaze upon Hong Kong for the latest edition of Art Basel Hong Kong, Phillips opened its new Asia headquarters at the WKCDA Tower, right next to M+ Museum, in Hong Kong’s West Kowloon Cultural District. Meanwhile, Sotheby’s is opening new headquarters in Shanghai this year as well as new headquarters, new exhibition space and salesroom in Hong Kong next year. Not to be outdone, Christie’s will be moving into its own expanded premises in the city in 2024.

The consensus is quite clear that the main draw for these auction houses are the collectors in mainland China, with Hong Kong primarily positioned as a key point of access and transaction. Market pressure caused by geopolitical tensions is a concern but one unlikely to be addressed by any major industry player, at least publicly, for now.

It is also worth noting the tremendous growth of local auction companies in countries like Japan and Korea, thanks to a local collector base bolstered by the rise of younger art buyers. For example, SBI Art Auction, based in Tokyo and specializing in contemporary works, reported a marked increase in number of works sold and increase of bidding prices in recent years.

In the case of Japan, there also exists the supposedly elusive demand for high-end artworks, with at least one local art collector successfully bidding for the $18.7 million Warhol self-portrait at Sotheby’s 2022 sale of the Macklowe Collection.

The growth potential of such specific local auction markets has inevitably drawn the attention of the mega auction houses, with Sotheby’s re-entering the Korean auction market with its appointment of Jane Yoon, as Managing Director, to helm a new office in Seoul.

Nonetheless, there is an argument to be made for long-term growth against hype. Korea saw its auction market heat up over the past two years but there has been a visible cooling off following Frieze Seoul in September 2022. While these figures could not be independently verified, according to Auction Daily, the total amount of local auction bids, which reached $75 million (KRW 95.3 billion) in the third quarter of 2021, was reduced to $35 million (KRW 43.9 billion) in the third quarter of 2022.

Singapore experienced a great deal of market interest in the lead up to its inaugural art fair ART SG in January this year, including its first on-site Sotheby’s auction in fifteen years in August last year. However, there has been no international auction activity in the city since, even with its constant attempt to position itself as a gateway to the Southeast Asian art market.

At this juncture, East Asia looks to be the testing ground for auction companies as they figure out what expansion plans will help them to stay relevant in a globally volatile financial market. At least, until some other seemingly new and attractive city or region grabs their capricious attention.

This analysis was originally commissioned by London-based Pictorum Advisory for their April newsletter.