Glossary

This glossary gives further detail to frequently used terms in our reports.

A

ArtTactic Auction Indicator

A measure that looks at the relationship between the hammer price and the auction mid-estimate. It is calculated by adding up all lots sold above the mid-estimate divided by lots that sold below the mid-estimate, including unsold (bought-in) lots. The Indicator reading will be between 0 and 100, where 50 indicates that there is an equal amount of lots selling above the mid-estimate as below. The Indicator provides the reader with a yardstick of how much demand or competition there is in a particular market (i.e., buying pressure). The higher the reading, the more buying competition there is. The likely outcome of a high Indicator (i.e., above 50) is that auction houses are likely to raise pre-sale estimates for future auctions to reflect the increasing demand.

ArtTactic Risk Barometer

A reading conducted every 6 months as part of the Art Market Confidence survey among art market experts. The experts are asked to rate the level of perceived risk in the current art market on a scale from 1 to 10, where 1 equals no risk and 10 represents very high level of risk.

ArtTactic Speculation Barometer

A reading conducted every 6 months as part of the Art Market Confidence survey among art market experts. The experts are asked to rate the level of perceived speculation in the current art market on a scale from 1 to 10, where 1 equals no speculation and 10 represents very high level of speculation.

B

Blue chip

Art with great value that is reliably profitable and expected to hold or increase its economic value, regardless of the general economic ups and downs. This term can also be used to describe artists as well as galleries.

Bought-in lot

If there are no bids on a lot, or if bidding does not reach the reserve price, the lot is ‘bought in,’ meaning it is left unsold and remains the property of the owner. Bought-in rates can be expressed both in terms of percentage of lots unsold or percentage of the total value (based on low estimate) that these lots represent.

Buyer’s premium

The amount above the hammer price that is paid as part of the total purchase price.

E

Estimate

Each lot is given a low and high estimate, usually representing the opinion of auction house experts about the range in which the lot is likely to sell at auction. Estimates are based on the examination of an item and recent auction records of comparable pieces. An estimate provides prospective buyers with an important preliminary guide to value and is generally the basis for establishing the reserve price.

G

Guarantee

An agreement by which the seller agrees to consign their artwork or collection to an auction house. The auction house or a third party agrees to guarantee to the seller that, whatever the outcome of the auction, the seller will receive a minimum sale price for the work or collection, and is also likely to receive a percentage of the overage above the guaranteed price.

H

Hammer price

The winning bid for a lot at auction. It is the price upon which the auctioneer’s hammer falls, determining the sale price, but does not include the buyer’s premium.

Hammer ratio

The hammer ratio represents the relationship between hammer price and the average pre-sale auction estimate. This ratio determines how a lot performed in relation to its presale estimate. The better performing a lot is, the larger the hammer ratio. This indicator can be used to identify lots that experienced a ‘surprise’ outcome and might signal a positive shift in collector demand. Tracking the hammer ratio of a single lot over time enables ArtTactic to produce the Auction Indicator.
(Related terms: Hammer to average estimate ratio, hammer to price-estimate ratio, price to average ratio, ArtTactic Auction Indicator)

L

Longevity Indicator (LI)

This indicator is based on the survey question: How important do you think the artist’s market will be in 10 years’ time? Where the respondents have the option to answer: High, Medium or Low. The LI reflects the percentage of respondents that believe the artist will be of ‘High’ importance in 10 years’ time. The Indicator aims to track fashion vs. longevity. 
(Related term: Long-term Confidence)

Lot

An individual object or group of objects offered for sale at auction as a single unit.

O

‘On-the-rise’ artists 

A category of artists included in ArtTactic’s 6-monthly Art Market Confidence survey and represents a group of younger artists (below 45 years old) that have started to see significant traction in both the primary and auction market.

P

Price realised

The final purchase price of a lot, which includes the hammer price with the buyer’s premium.

R

Reserve price

The minimum price the seller has agreed to sell an artwork for. The seller is only obligated to sell the artwork once the bid amount meets or exceeds the reserve price. The reserve price usually sits 5%-20% below the low estimate depending on the value of the artwork. The higher the value, the closer the reserve price tends to be to the low estimate.

S

Sell-through rate

A calculation comparing the amount of lots up for auction against what is actually sold. This is usually expressed as a percentage.

Short-term Confidence Indicator

This indicator is based on the question: How do you see the development of the artist’s market in the next 6 months? Where respondents have the option to answer: Positive, Neutral or Negative. The Indicator reflects the relationship between Positive and Negative responses, and a reading above 50 implies that there is more positive sentiment than negative in the market. 

W

Withdrawn lot

An artwork that has been removed from the sale. This can be due to a number of reasons such as market conditions, personal circumstances, and questions of legality or provenance.