Secondary market

Definition

The secondary market refers to the platform where previously owned or issued goods, such as art pieces, are bought and sold. This market plays a crucial role in determining the value and liquidity of artworks after their initial sale, enabling collectors, investors, and institutions to trade pieces in a dynamic environment. Within the context of auction houses and gallery systems, the secondary market facilitates transactions that can significantly influence contemporary art trends and pricing in Asia.

5 Must Know Facts For Your Next Test

1. The secondary market for art has seen significant growth in Asia, reflecting a booming interest in contemporary Asian artists.
2. Auction houses play a pivotal role in the secondary market by providing a venue for selling high-value artworks, often resulting in record prices.
3. The health of the secondary market can be influenced by economic conditions, collector trends, and the popularity of specific artists or movements.
4. In Asia, both traditional and online auction platforms are expanding access to the secondary market, making it easier for collectors to buy and sell art.
5. Art fairs have become important events for the secondary market, allowing galleries and collectors to showcase works that are available for resale.

Review Questions

• How does the secondary market differ from the primary market in terms of art transactions?
  • The secondary market differs from the primary market primarily in that it deals with artworks that have already been sold once. In the primary market, buyers purchase directly from artists or galleries for the first time. Conversely, in the secondary market, these previously owned artworks are resold between collectors or investors, impacting their perceived value based on demand and recent sales trends.
• What role do auction houses play in shaping the dynamics of the secondary market in Asia?
  • Auction houses are instrumental in shaping the dynamics of the secondary market in Asia as they provide a structured environment for buying and selling high-value artworks. They conduct public auctions where bidding can drive prices significantly higher than expected, thus influencing overall art valuation. Additionally, these institutions often curate sales based on current trends, attracting both local and international collectors while also impacting artist visibility and desirability.
• Evaluate how economic trends affect the secondary art market in Asia and what this means for contemporary artists.
  • Economic trends play a vital role in the functioning of the secondary art market in Asia. During periods of economic growth, there tends to be increased disposable income among collectors and investors, which can lead to higher demand and prices for artworks. Conversely, economic downturns may result in decreased spending on luxury items like art. This fluctuation affects contemporary artists as their careers can be directly tied to these economic cycles; during boom periods, they may gain recognition and sales opportunities while facing challenges during recessions.

Related terms

primary market:

The primary market is where new artworks are first sold directly by artists or galleries to buyers.

auction house: An auction house is a business that facilitates the buying and selling of artworks through public auctions.

art valuation:

Art valuation is the process of estimating the worth of an artwork based on factors like provenance, condition, and market demand.