CNA Explains: Auction lots that shatter estimates. Is that vase in your storeroom worth a fortune?

SINGAPORE: In October, a seemingly ordinary Chinese vase sold for an astronomical sum of money at an auction near Paris.

Valued at a respectable €2,000 (US$1,966), it sparked a bidding war among about 30 people at the auction in Fontainebleau, and eventually sold for €7.7 million – or €9.12 million including fees.

Auction lots actually exceed their estimates significantly on a fairly regular basis, though perhaps not by 4,000 times as seen for that tianqiuping, or "celestial sphere vase".

This is particularly true in the realm of Chinese art and ceramics.

So how does this happen? How often does this happen? And could something you own be the next object to spark a bidding war?

To find out, CNA spoke to experts at two auction houses.

How does this happen?

Auction house Sotheby's is used to works soaring well above their estimates, said Mr Nicolas Chow, its worldwide head and chairman of Chinese works of art.

"Those are usually top-quality pieces fresh to market and collections with impeccable provenance," he said.

However, the expertise of specialists at top-tier auction houses means that they are unlikely to see margins like the one in Fontainebleau, Mr Chow added.

"We pride ourselves in our expertise and so our estimates are much more calibrated to the market than what might for example happen in a small country sale in France where one sometimes finds 'sleepers', that is, objects of great value and historical importance that have not been recognised as such and are under-catalogued," he said.

New discoveries made after an estimate has been agreed upon can also send prices surging, said Ms Gigi Yu, Bonhams' head of Chinese ceramics and works of art for Hong Kong.

"This can be a newfound prestigious provenance, research-proved evidence on its rarity or importance in history, or anything that speaks in favour of the value of the object," she said.

"While auction house specialists are professionally trained to price the works as accurately as possible, collectors of Chinese art can themselves be deeply knowledgeable about what they collect too, so occasionally these discoveries can also come from them."

A key factor in the price of the tianqiuping skyrocketing was the bidding war that it triggered. So what are the elements that can contribute to this kind of interest?

Ms Yu and Mr Chow both spoke of the significance of an object being fresh to the market.

"Generally speaking, objects that are fresh to the market, in good condition and with a trusted provenance are sought after in the market," Ms Yu said.

"As to whether it triggers the bidding war, other factors – sometimes subjective – weigh in as well, just like any other items offered at auction."

Mr Chow said that other factors include rarity, beauty, condition, historical importance, provenance and fashion.

"All these parameters will be calibrated differently depending on the period and nature of the work," he said.

"Generally speaking, fresh and outstanding property, regardless of category – ceramics, paintings, jewellery, et cetera – is always highly sought-after.

"Objects can be controversial and sometimes our conservative estimates and guarantee lines will reflect a diversity of opinions."

How often does this happen?

Even if lots don’t sell for 4,000 times their estimates at auction houses like Sotheby’s and Bonhams, estimates can still be exceeded by significant margins.

Ms Yu recalled one example: A white jade cup that Bonhams offered at auction in London back in May 2013.

Estimated to be worth somewhere in the region of £8,000 to £12,000, it ended up selling for £133,250 (about US$202,000 at the time).

"I handled the sale of a rare white jade two-handled 'deer' cup, which went on to sell for 16 times the estimate," she said.

"It could achieve that high because of the rarity of the piece, especially the deer handles and the fanggu mark, as well as for the quality of the stone. Also, the market was quite robust at that time."

According to Bonhams, jade pieces carved with the Qianlong fanggu mark were inspired by archaic bronzes. This reflected the desire of the Qianlong Emperor to draw moral strength and righteousness from the examples of the ancients.

A bidding war at a Sotheby's auction in Hong Kong on Oct 8 this year, meanwhile, pushed the value of a rare Ming dynasty chair to nearly 10 times its estimate.

The huanghuali folding horseshoe-back armchair had an estimated value of between HK$10 million and HK$15 million (US$1.27 million to US$1.91 million), but a "15-minute frenzy" in which more than 60 bids were made sent its price up to more than HK$124 million.

"It is an auction record for a Chinese chair, the second-most valuable piece of Chinese classical furniture sold at auction, and the third highest price paid for any chair on the secondary market," said Mr Chow.

In the world of Chinese ceramics, an estimate of HK$100 million can still be doubled and nearly tripled, as was the case for a Northern Song dynasty-era brush washer at a Sotheby’s auction in Hong Kong in October 2017.

Twenty minutes of tense bidding saw the millennium-old Ru ware piece sell for HK$294.3 million (about US$37.7 million at the time), a world record for Chinese ceramics at the time.

How do you find out if you own something valuable?

An estimate itself can also be a significant step up from what an object was originally purchased for, when auction houses recognise artefacts for what they really are.

Mr Chow pointed out the example of a 15th-century Chinese bowl that was bought for US$35 at a yard sale near New Haven, Connecticut, and later identified as a rare Ming dynasty artefact.

Its value shot up to US$300,000 to US$500,000 when Sotheby's offered it at auction in New York in March 2021, and it was eventually sold for US$721,800 according to news agency UPI.

So how can someone find out if there are treasures among the objects they own?

"An easy way is to bring it to a reputable auction house that has a strong track record of dealing in that particular category," said Ms Yu.

"But again, Chinese art is a discipline that requires deep knowledge and experience to understand – I would recommend collectors to do as much homework as possible.

"The more they see, read and handle, the more they can discern what is great from good."

Mr Chow shared similar guidance, recommending that owners contact Sotheby's unless they are professionals.

"We have a team of specialists ready to advise you on any property that you have, from old master paintings, to Chinese works of art, handbags, jewels or sneakers, and their contacts are easily found on our website," he said, adding that the specialists review such submissions at no cost.

When it comes to collecting, however, Ms Yu had these words of advice: "I would always recommend my clients to buy what they truly love, instead of thinking they should only get what can potentially shoot really high up at auction.

"The reality is that, in most cases, you would probably not be the only person spotting the potential. But if you own a piece that you truly like, that would belong to you and you alone."