It all started with underwhelming results at auctions and fairs, unable to match the successes of previous years. Then, reports like the Art Basel & UBS Global Art Market Report 2024 and Deloitte Private Art & Finance arrived, confirming what, after two booming years, feels like a self-fulfilling prophecy.
In 2023, global sales dropped by 4% compared to the previous year, settling at around $65 billion. The art market is slowing down.
Now that we’re at a standstill, it’s worth asking what we were expecting. It's clear that, like many other sectors, the art market couldn't escape global uncertainties and geopolitical tensions, which have stalled international collecting. The growing difficulty in maintaining a global network of exchange has shrunk business volume, making collectors and investors more cautious. And even slight hesitations can trigger dangerous chain reactions in a notoriously volatile market like art.
The Russo-Ukrainian war has primarily affected Russian collectors, who had already weakened in the international art market for some time. The conflict that erupted on October 7 has, however, impacted many Jewish collectors who, despite living in America, England, or Paris, remain deeply connected to Israel
Mariolina Bassetti, Chairman Post-War & Contemporary Art Continental Europe, Chairman Christie's Italy, in Deloitte Private Art & Finance, 2024
In 2023, global art sales fell by 4% compared to the previous year, reaching approximately $65 billion.
It's important to consider that 2022 was an exceptional year, marked by an unprecedented number of sales from various single-owner collections, including those of Paul G. Allen ($1.6 billion), Anne H. Bass, and the Ammann couple sold by Christie’s, as well as the Macklowe collection and David M. Solinger sold by Sotheby’s. Together, these collections alone accounted for over $2.6 billion.
In the past year, even high-value pieces have seen hesitation, with sales of artworks over $10 million dropping by 22.2%. While auction house sales decreased by 7% compared to the previous year, gallery and fair sales fell by 3%.
This overall slowdown, as noted by Zachary Small of The New York Times, also impacts emerging artists. Their works, which were bought at record prices during the pandemic, are now being resold for much lower amounts.
One painting, by the Ghanaian artist Emmanuel Taku, sold at auction in 2021 for $189,000. When it was put up for auction again earlier this year, it fetched just $10,160.
Zachary Small, The New York Times
Passion Assets & Design
The so-called "passion assets" are thriving. Watches, handbags, jewelry, and luxury wines continue to spark significant enthusiasm, as evidenced by the recent sale of a $44 million diamond. This trend highlights a growing preference for functional items that also serve as symbols of social status.
The design sector, which experienced a boom during the lockdown as people refreshed their living spaces, is now stabilizing. Among the most sought-after names are Italians Carlo Bugatti, Pietro Chiesa, and Max Ingrand for FontanaArte; Osvaldo Borsani, Gio Ponti, and Luigi Caccia Dominioni for Azucena; and Gabriella Crespi and Ettore Sottsass. Notably, Gaetano Pesce is gaining traction, thanks in part to his recent collaboration with Bottega Veneta.
NFTs
The sales of NFTs in the art segment have also declined, dropping by 49% compared to the previous year. While Justin Bieber paid over $1 million for a Bored Ape Yacht Club NFT by Yuga Labs in January 2022, that same piece is now worth about $37,000. The NFT auction results, with revenues falling from $232 million to just $13 million, reflect a decrease in interest from casual investors. However, collectors and enthusiasts continue to show interest, and brands like Reddit, Nike, Gucci, Adidas, and Coca-Cola are integrating NFTs into their promotional strategies.
This may suggest that the NFT market is maturing, focusing on higher-quality and more sustainable projects. As a result, it could strengthen, supported by a smaller but more dedicated group of investors.
New International Hubs
New York remains a key hub for the art market, but Hong Kong is emerging as a new powerhouse, thanks to high-profile events like Art Basel, which has returned in full swing after a three-year hiatus under the direction of Angelle Siyang-Le.
Meanwhile, London, despite having navigated the challenges of Brexit and COVID-19, is losing ground to Paris. The driving force behind this shift is once again the Art Basel group, which has chosen the French capital for a new ambitious fair project, attracting many international galleries to open new locations there (Hauser & Wirth, Mendes Wood DM, Thomas Zander, Stuart Shave’s Modern Art, Moretti Gallery, and Friedman Benda will all open new spaces in Paris by 2024). Additionally, starting January 1, 2025, France will apply a reduced VAT rate of 5.5% on all art transactions, a move that will facilitate sales but could pose challenges for the nearby Italian market, which is slow to adapt.
New Stakeholders Demand New Strategies
Auction results reveal an intriguing trend: a surge in demand from Millennials and Gen Z. Christie’s reported a 35% increase in new clients, with over a third from these younger generations. Sotheby’s and Phillips also confirm that around 40% of new bidders are Millennials and Gen Z. This shift is mirrored in online sales, which grew by 7% in 2023 and now account for 18% of the total market revenue. This demographic change could revolutionize purchasing and investment dynamics, necessitating a reevaluation of traditional strategies.
Main Sources: Art Basel & UBS Global Art Market Report 2024, Deloitte Private Art & Finance.
Opening Image: Frame from the film "The Best Offer" (2013), directed by Giuseppe Tornatore.