Released in early March, the 2020 issue of the annual Art Basel UBS global art market report provides an in-depth analysis of key trends and results from the industry’s overall performance and future challenges. The report takes a comprehensive look at the major vendors sectors and collecting trends driving these outcomes across the globe. Below is a more detailed break-down of the report’s findings:
The Global Art Market in 2019, showed sales in China reaching $11.7 billion. That’s a drop of 10%, China’s second year in decline. To date, China contributes 18% to the global market share. France was the only leading market with an increase in overall sales reaching a total of $4.2 billion, a rise of 7% in value and 1% increase in market share to 7% in 2019.
Among the findings in overall Dealer sales, new clients have become a primary focus, with these collectors increasing the share of sales by 5%, reaching a total contribution of 34% to the overall $36.8 billion in total sales achieved in 2019. In data sourced from a survey of interviews, cultivating new buyers was the highest concern among the trade sector in 2019. Among the sample of US collectors, they reported galleries were the most preferred channel through which to make art purchases. This behavioral trend among collectors appears to be connected to the growth of private sales in the auction sector, which allows the kind of transactional flexibility available in the primary market. The need to source high-value works and maintain supply is driving increased competition over the representation of artist’s estates as well. Gallery sales are skewed by power laws where the bulk of value comes from a few artists. The report revealed that 43% of overall annual gallery sales in 2019 could be attributed to the galleries’ top three artists.
Auction sales have seen the largest decline of all sectors, a 17% decrease over the past two years. The shift from public to private sales within the past year has yielded an excess of $1.8 billion achieved privately between top houses, Christie’s and Sotheby’s. At auction, the changes in sales across different price segments indicate a major shift. At the high-end price range, ultra-high-value works, at or above $10M, have seen an overall decline in sales of 39% from 2018 to 2019. At the lower range of the high-value market, works estimated at $1 million and $5 million saw the lowest decline in sales. Overall, sales of works across the low, middle and high values segments each decreased since 2018, but works estimated between $250,000 and $5 million saw the smallest decrease at 6%.
In 2019, Art Fair sales achieved $16.6 billion, seeing less than 1% increase from the $16.5 billion achieved in 2018. Despite a plateau in growth, fairs have remained a crucial site of transactional health for the global market and as an important attraction for emerging collectors. Fairs were found to be more popular among younger collectors compared to older ones, with 70% of the base of millennial collectors reported frequently buying at art fairs.
Trends on the rise pertaining to Global Wealth show that young collectors are becoming increasingly impactful to overall outcomes, according to data gathered from 1,300 high-net-worth individuals in the U.S., U.K., Germany, France, Hong Kong, Taiwan and Singapore. The survey found that millennial collectors are transacting in the most variable of sales channels, across trade, auction and online sales. They are also flipping works from their collection at the highest rate, with an average resale period below four years. It appears the strategy among the youngest base of art collectors is to seek out risk at a lower price level in order to build wealth. When we look at the demographics of the global resale rates, it makes sense that U.S. collectors hold onto their works the longest — the U.S. has the highest number of billionaires in the world, whose art assets are concentrated at the ultra-high-value level which appreciate over long periods of times. Collectors from Germany, the UK, Singapore, and France sell the fastest after original purchase.
With secondary market figures revealing a shifted focus around works priced in the middle market, private and online sales will continue to be the market’s antidote. In the survey around 1,300 HNW collectors around the globe, 24% reported buying works in excess of $1 million. This leaves more than 75% of the remaining base actively searching for works under the six-figure mark. And with 92% of HNW millennial collectors from this survey buying online, the middle-market seems a key area for vendors to maintain longevity with their young prospects.