2.0 Key Findings
Positive market outlook, public May 2018 auction sale surpassed the last-fall auction sale.
The 2018 spring live auction sale comprised of 4 major auction houses (Heffel, Consignor, BYDealers, Consignor) and reached $20,325,225 in sales. Heffel made $14,624,761 in sales, Consignor $2,203,334, Waddington's $2,043,230 and BYDealers $1,453,900. Total sales have increased 9% compared to the last live auction sale in November 2017.
Heffel Fine Art Auction House in Toronto dominated the spring Canadian auction sales.
Among the four auction houses, Heffel acquired the largest share by value in the 2018 spring auction sale, accounting for 69%, however their supply volume constituted 27% during the May auction sale .
Waddington surpassed its last Canadian live auction sale due to an increase in artwork supply.
Waddington's total sales rose by 68% above its 2017 fall auction sale, bringing its sum to $2,161,880. Although, as Waddington maintained a similar sell-through rate of 74%, this outperformance can be attributed to the increase of 48 artworks supplied on the auction house.
With a constant sell-through rate and volume supply , Consignor’s spring sale in 2018 surpassed that of fall 2017
Maintaining a similar sell-through rate and volume supply as the previous fall auction sale, Consignor’s spring sale grew by 75%, totaling $2,203,334. This increase was due to the sale of “Hot day in Kensington Market” by William Kurelek at $472K.
90% of artwork on Canadian secondary art market is priced below $100,000. The most popular price range is between $10,000 and $50,000.
With the constant sell-through rate of 75% at every price segment, artworks priced below $100K accounts for 90% of the sales volume. Moreover, 48.2% of artworks were sold in a price range of $10K-50K.
Artists from Les Automatistes movement shows outstanding performance at the last live spring auction sale.
Paul-Émile Borduas and Jean Paul Lemieux are ranked in top 2 of the 2018 auction sales with a combined 28.86% of sales (Paul-Émile Borduas with 19.71% of sales and Jean Paul Lemieux 9.15%). Moreover, Borduas‘ “Figures Schématiques” was the most highly priced artwork sold, at $3,601,250 through Heffel.
Group of Seven artists’ established artwork on the secondary market ranked these landscape painters as the 20 best selling artists since 1984.
Lawren Harris, Alexander Jackson, and James Hervey Mcdonald, Arthur Lismer, Frederick H. Varley associated with the Group of Seven are ranked in the top 20 best selling artists on the secondary market, representing 47% of the market share. Emily Carr and Tom Thompson were closely influential to these Canadian landscape painters.
2.1 Canadian Auction Landscape
BYDealers
Bydealers is the first auction house collaborating directly with primary market dealer, a new business model. This allows ByDealers to inherit expertise of the associate dealers, and their extensive knowledge of the art scene and its players. The aggregate of these experts is able to set up auctions comprised of the most sought-after artwork and present it to collectors.Buyer’s premium policy: BYDealers charges a 20% buyer’s premium on the hammer price of each lot sold. The buyer’s premium is payable by the winning bidder, in addition to any applicable sales taxes.
Heffel Fine Art Auction House
Heffel Fine Art Auction House, a division of Heffel Gallery Limited, was established in 1995, and through its inaugural auction, became the first western Canadian fine art auction to achieve over $1 million in sales. Heffel has revolutionized the way art is sold in Canada and now conducts live auction events semi-annually, in May and November of each year. It is one of the most prestigious auction houses in Canada.Buyer’s premium policy: The Buyer’s Premium is the amount paid by the Buyer to the Auction House on the purchase of a Lot, and is calculated based on the Hammer Price as follows: a rate of 25% of the Hammer Price of the Lot up to and including $25,000; plus 20% on the part of the Hammer Price over $25,000 and up to and including $5,000,000; plus 15% on the part of the Hammer Price over $5,000,000, plus applicable Sales Tax.
Waddington's
Established in 1863 the formerly ‘C. M. Henderson & Co. Auctioneers’ was transferred to Frank Waddington in 1939 and renamed ‘Waddington’s’. With over 160 years of experience in the Canadian art market, Waddington’s expertise ranges from Asian, Canadian, contemporary, international and Inuit art, decorative arts, fine jewellery, as well as fine wine & spirits. Waddington’s is also renowned for its ability to find or create markets for unique collections such as the contents of Maple Leaf Gardens, Toller Cranston’s Toronto Collection, The William Jamieson Estate Collection, the FXSmith Studio Collection, and many others.Buyer’s premium policy: Waddington’s charges a buyer’s premium of 20% on the hammer price. Buyer’s premium and applicable Canadian taxes are added to the hammer price. Taxes are exempt for any items directly shipped from our premises out of Canada.
Consignor Canadian Fine Art
Created by Ryan Mayberry in early 2012, Consignor Canadian Fine Art bridges the gap between traditional art auction services and the online fine art marketplace. With dedicated preview and gallery space, regular art auctions, and partnerships with national art experts, Consignor provides both buyers and sellers of Canadian Art a unique and effective set of services which marry the traditional methods of promoting artwork and the means of building a collection.Buyer’s premium policy: A buyer’s premium of 18% of the successful bid price is to be paid by the Successful Bidder to CAL as part of the purchase price. In addition, 13% HST (Harmonized Sales Tax) is applied to the successful bid (hammer) price and buyer’s premium.
Walker’s
Walker’s provides a comprehensive range of services including expertise in the appraisal and sale of 19th and 20th century Canadian and European paintings, and Asian Arts.
Hodgins
Hodgins is the leading and most trusted art auction house in Alberta which has been selling Canadian & International art since 1985.
Hammer price from 2009-2017
The total annual hammer price in the last 10 years on the secondary market in Canada have never surpassed $25M. In 2009, the yearly total sales started at $25M which was below the high estimate price. However, due to a lower supply of artworks on the art market, the total sale from 2009-2014 decreased by an average of 8% year-over year. From 2015-2017, the total annual hammer price surpassed the auction houses’ top-line estimation, reaching the $25M mark once again on the secondary market.
Auction Houses Hammer Price

The annual volume sale and sell-through rate from 2009-2017Annually, on average, the Canadian secondary art market offers 489 artworks. Whereas only 69% of them would typically be sold, (337 lots ) in the last ten years. In 2010, the auction house reached its peak in sell-through rate at around 81%. The same year, auction houses had a career low of 69 unsold artworks. From 2011-2017, even though the artwork's volume supply on the secondary market increased, the average sell-through dropped by 2% annually over 7 years compared to 2010.
Sell-through Rate

Share of the Total Sales by price bracket from 2009-2017
This chart shows the total number of individual artworks and the value of each artwork by auction houses in the past 10 years. The sales volume is strongly skewed towards the lower-end of the chart, where around 90% of the artworks were sold under $100k, they represent a small proportion of the value of the sales (32%). At the higher end, 10% share of each work were sold beyond $100k, this market segment accounts for 68% of the total secondary market. It is important to note that the volume sale of each of these artworks were limited, investors highly value these works above $100K.
Sales and Value per Price Range

2.2 Review of Recent Live Auction
BYDealers
Due to a high price of Printemps à Québec-Ouest which was sold significantly above the average hammer price of the other artworks, this outlier was removed to make the chart more readable. The color blue corresponds to the area where the hammer price is below the low estimate value. The color orange corresponds to the area where the hammer price is between the low and high estimate price, and the color yellow is where the hammer price is above the high estimate price.
Hammer Price, BYDealers

Hammer Price Under 100k, Bydealers

About 45% of the artworks were sold below the low estimate price, about 45% of the artworks were sold between the low and high estimate price and remaining 10% of the artworks were sold above than the high estimate price. Thus, by comparing the hammer price with the low estimate price, the average hammer-low estimate proportion of the artwork’s hammer prices below the low estimate value was at 85%, and the average hammer-low estimate proportion of the artwork’s hammer prices between the low and high estimate price was at 118%. Thereby, most buyers have been biding ±15% from the low estimate price.
Hammer Price vs. Low Estimate, BYDealers

The bar chart below illustrates the percentage of artwork sold in different price ranges in November 2017 and May 2018. According to Price Segmentation, in May 2018, 93% of the artworks were sold below $100K. By comparing this with the performance in November 2017, 15% more artwork were sold under $10K while 14% fewer artworks were sold between $10K and $50K.
Price Segmentation, BYDealers

Value vs. Volume, Bydealers

In the summary table above, the low average earnings rate (total sales / total average estimate) indicates ByDealers averaged 57% in sales for every project earned in final sales. In comparison with the other auction houses, the average earnings/sell-through rate indicated average earnings of an auction, based on the proportion of artwork sold. BYDealers has an earnings/sell-through rate of 0.867 which means in comparison to the other auction houses’ average earnings, ByDealers earned 0.87 cents in sales for every projected earned dollar. The auction sell-through rate is at 0.66. Among the sold artwork, the total sales in ByDealers ($2,148,400) are below the total low estimate price ($3,180,000).
Heffel
To further analyze Heffel’s performance, a chart representing the hammer price of each artwork and a diagram representing price segmentation is conducted in the following charts.
According to the following diagrams, 75% of the work was sold at a price below $100K. Among them, around 13% of them were sold at a price under the low estimate price. 47% of the artwork was sold between the low and high estimate price range, and 40% of the artwork was sold above the high estimate price. A large portion of artwork was sold above the high estimate price.
Hammer Price, Heffel

Hammer Price Under 100k, Heffel

From the work that was sold under the low estimate price, the average hammer-low estimate proportion is at 92%, and from the 47% of the work that was sold between the low-high estimate price, the average hammer-low estimate proportion is at 110%. 60% of the buyers have been biding ±10% from the low estimate price.
Hammer Price vs. Low Estimate, Heffel

The bar chart below illustrates the percentage of artwork sold in the different price range in November 2017 and May 2018. According to Figure Price Segmentation, in May 2018 73.12% of the artworks were sold below $100K, while 26.88% of artworks were sold above $100K. In comparison with the performance in November 2017, 3.53% more artworks were sold between $50K-100K. From the performance of price range, Heffel focuses more on a middle-to-high end of the art market which amounted between $10K and 1 million.
Price Segmentation, Heffel

Value vs. Volume, Heffel

Among the artwork which were sold above the high estimate price, there is a significant gap between the low estimate price. Among the 84% of sold artwork, total sales by Heffel ($14,624,761) is between the total low estimate price ($11,501,500) and the total high estimate price ($17,038,500).
Thus, in proportion to the artwork’s pricing range, Heffel possess a significant amount of medium-to-high-end works with better quality where people feel comfortable biding above the high estimate price. Heffel typically auctions high-quality work that is actively in demand. For this reason, the bidding sentiment is enthusiastic and competitive. As a result, artworks are often sold above the high estimate price, which might indicate that intrinsic value of artworks is lower than what clients paid.
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Waddington's
To further analyze its performance, a chart representing hammer price of each artwork and a diagram representing price segmentation are conducted as following figures. According to the bar chart, Waddington sold a large proportion of artwork at a price between $0 to $50K. Three artworks sold above the $100K mark, significantly above the high estimate. Excluding these outliers, 97% of total artworks were sold under $100K. Among those artworks, around 27% of the works were sold below the low estimate price, 27% of artworks were sold between the low and high estimate price range, and 45% of the artwork were above the high estimate price. From this chart, it illustrated that Waddington’s performance has surpassed their expected results.
Hammer Price, Waddingtons

Hammer Price Under 100k, Waddingtons

From the 27% of works sold under the low estimate price, the average hammer-low estimate proportion is 94%. Moreover, from the 27% of works sold between the low and high estimate price, the average hammer-low estimate proportion is 121%. Even though 1/4 of the artworks were sold under the low estimate price, the standard error of their corresponding low estimate price is at around ±2%. Thus, the artworks were mostly sold around the low estimate price. Among the 74% of sold artwork, the total sales by Waddington ($2,161,880) is above the total low estimate price ($1,466,100) and is below the total high estimate price ($1,927,800). Waddington has an average earnings rate at 1.274, and their average earnings/sell-through rate is at 1.727.
Hammer Price vs. Low Estimate, Waddingtons

According to the value and volume diagram, Waddingtons generally sold 94.68% of all artwork at a price ranging $0 to $50K. The most revenue was generated by artworks in a range of 10K -50K, followed by artworks which were bid above 100K, though these high-value artwork only make up 3.19% of the whole volume of works sold. Waddington had the best overall results in their auctions. The total sales were above the high estimate price, which means Waddington’s auction generated more sales than the maximum predicted sales. Moreover, the auction house made an extra 0.27cents/ dollar. Compared to other auction houses, they generated an extra 0.73 cents/dollar. Regarding their sales, the artwork’s hammer price is sold at a profitable range and most works are sold above the high estimate price.
Price Segmentation, Waddingtons

Value vs. Volume, Waddingtons

Compared to the other auction houses, Waddington’s average estimate price is below the average art market price for similar work. Most of the sold artwork is under $100k. Even though they have some high-quality work, they lack works which merit a hammer price above $1M.
Consignor
According to this graph, only three works have been sold above $100K. In contrast to the other two artworks, lot 38 was sold below the high estimate price. Moreover, lot 21’s hammer price seems to have a large gap compared to the low estimate price.
Hammer Price, Consignor

Hammer Price Under 100k, Consignor

Even though 1/5 of the artworks were sold under the low estimate price, 98% of the orange dots are touching the blue line, where the standard error of their corresponding low estimate price is at around ±5%.
Hammer Price vs. Low Estimate, Consignor

According to the value and volume diagram, Consignor generally sold 92.22% of all artwork at a price point between $0 and $50K. While artwork priced above 100K generated the most revenue , these high-value artworks only account for 3.33% of the total volume of artworks. The second highest sales bracket was artworks priced between $10K and $50K . Based on this diagram, Consignor has a similar pricing strategy as Waddingtons.
Price Segmentation, Waddingtons

Value vs. Volume, Waddingtons

2.3 Market Overview
The sell-through rate based on low-estimate price segments
The fine art auction market is a growing market where volatility is high. Separating artworks into different low estimated price ranges shows how the sell-through rate remains consistent throughout different price ranges. In the last spring auction sale in 2018, auction houses’ price estimation did not necessarily prevent art collectors from buying prestigious artworks on the secondary market. In a highly volatile market, it’s rare to see a low fluctuating sell-through line seated at around 75% where unsold lots go hand in hand with the volume of artwork offered on the market. The consistent sell-through rate of the four major auction houses’ spring sale shows that for every four auctioned artwork, there is at least one unsold work. The market demand had been reasonably constant.
Sell-Through Rate Based on Low Estimate Price Segments

Hammer Price in proportion to Low-Estimate Price values.
This chart shows the hammer price to low estimate price ratio, where we compare the difference between the hammer price and the low estimate in different price segments in the last auction sale. On average, in the last spring live auction sale, the artworks were mostly sold beyond the auction houses’ estimation price, and the hammer price trendline is more skewed towards higher-end of the price segments. As price grew, investors are more confident about higher valued works.
Hammer Price in Proportion to Low Estimate, Different price Ranges

Price Segmentation
This table represents the market share of total sales and of the volume supply, as well as the change in the volume of shares from 2013-2018. Among the 211 individual artists which appeared on the last live auction sale, the artworks sold beyond $100k represents 70% of the total market share in 2018. Over the last five years, artworks priced above $100k have increased by 57% in the sales volume, resulting in an increased compounded annual growth rate of 11.95%. Moreover, artworks sold between $10k-$100K have a notable market share of the secondary market.
Price Segmentation

Canadian May Auction’s Sales and Value per price range
The secondary market sold a significant number of high-end artworks after the 2008 financial crisis since the demand for highly expensive artwork increased. This chart represents the value and the volume of artworks in different price ranges in the spring auction sale. In the volume sales, the most abundant sales according to hammer price segment is between $10k-$25k where it represents around 43% of the artwork sold in in Spring 2018. Although 90% of the artwork was sold below $100k, the high-end artwork selling above $1M represents 68% of the total value share in the four auction houses’ total sale. The volume sales/price is not proportioned to the value share/sale. Thus, the artwork’s quality is more profitable than the quantity.
May Auction Sales and Value Per Price Range

In the last Canadian spring auction sale, there were only two artworks that were sold beyond $1M. Both “Figures Schématiques” and “Morning Lake Superior” are top-priced artwork that were sold by Heffel at $3.6M and $1.1. As previously mentioned, these two prestigious artwork add up to around $4.7M which accounts for around 20% of the total spring auction sale. Heffel has also made more net sales than the other three auction houses by a margin of 2 paintings. Heffel is dominating the art market for the top-selling artworks where, they were responsible for 80% of the top 20 artworks’ selling price in the spring auction. The auction house’s reputation has surely gained the trust of many wealthy collectors.
Top Selling Artworks at the 2018 spring live auction sale

Artists
This chart shows the total sale and the market value of each artist at the 2018 live auction sale happening in- (Heffel, Waddington’s, Consignor and BYDealers). The highest selling artist in the spring auction sale was Paul Émile Borduas, whose sales totalled $4,167,750 representing one-fifth of total spring auction sale. Moreover, Jean-Paul Lemieux and Lawren Stewart Harris have each respectively made $1,934,500 and $1,856,068 during the last sale where their share of value was above 7% of the secondary market. Despite the diversity of the Canadian art market, the top three artists’ artwork hammer price represents around 38% of the spring auction sale. They surely serve as the leading artists share value on market.
Top 20 selling artists canada, 2018 spring live auction sale

Top 20 selling artists Canada, all time

"The highest selling artist in the spring auction sale was Paul Émile Borduas, whose sales totalled $4,167,750 representing one-fifth of total spring auction sale."
However, according to the all-time best selling artists ranking, Paul Émile Borduas’ artworks total sales are not ranked among the top selling artists of all time on the secondary market since 1984. Lawren Harris’ sales totalled $89,659,460 representing one-fourth of the that total secondary market. Moreover, eleven canadian artists’ works reached beyond $10M, accounting over 3% of the secondary market.
"5 artists; Lawren Harris, Alexander Jackson, and James Hervey Mcdonald, Arthur Lismer, and Frederick H. Varley, associated with the Group of Seven are ranked in the top 20 best selling artists on the secondary market."
Emily Carr and Tom Thompson were closely influential to these Canadian landscape painters.
The appearance of top Canadian Artists on the international auction market
This chart represents the proportion of Canadian individual artists who sold artworks at international auction houses. On the international auction market, more than half (58%) of the work was sold in the USA, 21% of the sales happened in the UK, and 7% of the sales reached France. Moreover, less than 2% of these Canadian artists work were sold in an Asian country such as China or Japan.
Auction House Value SHare, During Sale

Auction House Value Share

Even though Waddington’s is leading the share of sales volume with 39% in the last auction sale, Heffel is surely dominating the total sales’ value on the secondary market with 69%. This latter did not have the most supplied artwork on the market, but Heffel had a skewed pricing segmentation where the most expensive artwork was sold around $4M, surpassing Waddington’s total sales. In contrast to Heffel, BYDealers, Consignor and Waddington’s price segmentation were more skewed towards the lower-end, they had a more accessible price range for collectors to purchase arts. Therefore, Heffel’s high auctioned artwork has dominated the value share of the spring auction sales in 2018.