Where passion drives the market; in defiance of the country's flagging economy, the Italian art market has grown vigorously in the past decade. A new generation of collectors is discovering the country's contemporary artists and is moving into under-explored areas, such as nineteenth-century Italian painting

Apollo, July, 2005 by Carla Passino

A forest of heads filled the nave of the former San Paolo Converso church in central Milan when Christie's held its Modern and Contemporary Art sale there on 24 May. The crowd was so big that Christie's assistants had to move the paintings on display to make room for more chairs. As lot 329 was shown--Donna che nuota sott' acqua, an early forties marble sculpture by Arturo Martini (Fig. 5)--two telephone bidders and a woman in the room engaged in a war which pushed the price past the E800,000 estimate to achieve just under 2.402m [euro] (including buyer's premium). When the auctioneer lowered his gavel, the room erupted in applause. This price is a new world record for the artist and the first time a Christie's lot has broken the 2 million euro barrier in Italy. What makes it all the more striking is that the sale took place on the very day the OECD warned that Italy is facing a recession. But then the Italian art market has been defying a flagging economy for years.

'The market has held up well--it has consolidated', says Sonia Farsetti, with a certain degree of understatement; her auction house, FarsettiArte, sold Italy's top modern art lot last year, Picasso's Tete d'homme et nu assis, for 834,000 [euro]. Italian art prices have boomed since 1995 and grew by 8.8 percent between 2003 and 2004, according to an independent research company, Nomisma.

Scratch below the surface, however, and you discover that the structure of the market has evolved in line with those of other countries. 'Top-level works, by known names and perfectly preserved, have not suffered any impact from the post-11 September slump. Medium-level works, which have more of a furnishing value, have faced a drastic slowdown and some have dropped in value by up to fifty percent', says Andrea Ciaroni of Altomani & Sons, a dealer based in Milan and Pesaro. 'The client who used to buy a medium-low piece is disappearing fast', agrees Enzo Savoia of Bottegantica, a Bologna gallery specialising in nineteenth-century Italian paintings. 'But there is a new interest in art as a form of investment.'

Many Italian (and foreign) banks are capitalising on this interest by offering art banking--a service that helps identify and exploit opportunities in art investment--to their clients. However, 'I have never found a pure investor, without passion', says Alessandro Galli of Italian auction house Porro & C, which recently handled the sale of the Versace collection. Leading Italian collectors, who are usually major businessmen, such as Luigi Koelliker or the late Gianni Agnelli, aristocrats, such as Giuseppe Panza di Biumo, or affluent professionals, ooze passion. Such people as fashion designer Girolamo Etro, who bought Franz Xaver Messerschmidt's Incapable Bassoonist for $2.480m at Sotheby's in New York in January, tour international salerooms as indefatigably as they buy at home.

'There are a lot more private buyers than institutions, which usually buy slowly and more selectively, whereas we have plenty of hungry collectors', says Galli, expressing a view borne out by the Nomisma report quoted above, which estimated that museums and other institutions account for only six percent of purchases. Much of the market revolves around the major cities of central and northern Italy. 'Milan dominates, followed by Turin, Florence, Rome, Bologna, Padua and Venice, which are all at second place on the same level', says Stefano Stanzani of Nomisma. Parallel to this, however, are a number of strong regional markets specialising in local artists. 'That Genoa has four or five auction houses is certainly impressive. It is a small city without a wider area to prop up the market', says Galli. 'But then demand for regional works of art is very strong. In Genoa they like Ligurian paintings, in Naples, Neapolitan paintings.'

This also applies to modern art: 'Collectors often look to artists who come from their region. For example [Felice] Casorati sells well in Turin, Scipione in Rome', says Alessandro Porro, head of the modern and contemporary department at Porro & C. And it is modern art that is driving much of the market throughout the country. Last year, Sotheby's Italia had an average growth of 34.3 percent over 2003, but its modern and contemporary art department grew by a staggering 56.7 percent in revenue. 'There is great attention being paid to modern and contemporary art. For example, we had very high prices for our sale last November, but even the average range of 1970s works went really well, which is a sign of the market's health', says Filippo Lotti of Sotheby's.

Prices in this area of the market have reached the highest level in nine years, according to consulting company ArsValue.com, which tracks the results of modern and contemporary sales in Italy. However, collectors are showing a marked preference for established names. 'From 1995 to 2004, the average annual revaluation of the ArsValue 50 index, which tracks Italy's top fifty artists, has been 12.8 percent, with a performance of 31.4 percent in 2004', says Paolo Orioli of ArsValue. Among the auction best-sellers last year were modern classics dating from the early to mid-twentieth century, with works by Giorgio de Chirico, his brother Alberto Savinio, Giorgio Morandi, Renato Guttuso and Lucio Fontana all fetching more than 400,000 [euro]. Futurist pieces have taken centre stage at many sales: Umberto Boccioni's Ritratto Femminile sold for 657,800 [euro] at Christie's in Milan last November.