The global art market has experienced a decline in sales volume, with a four percent decrease in 2023, totaling $65 billion. This information comes from a comprehensive study conducted by cultural economist Clare McAndrew in collaboration with Art Basel and UBS.
The study reveals that geopolitical tensions and rising interest rates have contributed to a reduction in impulse purchases and investment willingness, particularly in the high-end segment of the market. Artworks priced above ten million dollars have struggled to attract buyers, indicating a cooling off from the post-pandemic boom.
The study also highlights changing dynamics in collector behavior. The average expenditure among art collectors dropped by 32 percent in 2023 compared to the previous year, while the median value of purchases remained relatively stable. This suggests that while the upper echelons of the market are facing challenges, the lower segments are gaining traction.
Despite these challenges, 91 percent of collectors surveyed expressed optimism about the art market's prospects over the next six months, which is a significant increase from 77 percent at the end of 2023.
In China, collectors, especially ultra-high-net-worth individuals, reported the highest median spending on art and antiques compared to their global counterparts. This reflects the uneven distribution of wealth within the country and its impact on the local art market. The United States dominates the global wealth landscape, accounting for 38 percent of all millionaires, followed by China with 12 percent, and the UK, France, Japan, and Germany collectively representing another 20 percent.
The impending transfer of wealth is another significant factor influencing the art market. An estimated $84 trillion is expected to change hands over the next two decades. The survey reveals that 91 percent of participants have inherited artworks or received them as gifts, emphasizing the importance of legacy in art collecting. However, younger generations, particularly Generation Z and Millennials, show a growing reluctance to purchase art that does not align with their personal expectations.
Generation X has emerged as the most significant spenders in the art market during 2023 and 2024, possibly reflecting broader economic uncertainties and changing priorities among younger collectors. The increasing popularity of works by female artists may also be linked to the generational transfer of wealth, as husbands pass on collections to their wives, aligning with a broader trend of recognizing previously undervalued artists.
Despite the challenges, there is a clear appetite for new and innovative works in the art market. A substantial 88 percent of collectors actively seek pieces from new galleries, while 52 percent invest in emerging artists. Dealers are currently favored over auction houses, and there is a resurgence in purchases made at art fairs. Traditional painting continues to dominate as the best-selling genre, indicating that collectors are gravitating towards established forms of artistic expression while remaining open to exploring new mediums.