Art Market Report 2024
In 2023, the art market experienced a paradigm shift with the emergence of alternative sales channels, including online platforms and social media, altering the traditional dynamics of art transactions.
art, market trends
In 2023, a lot of art was sold in new ways, not just in art shops. People bought art both in person and online, directly from artists or other sellers. This kind of selling had different results over the past year. Some rich art collectors used the internet to buy from art dealers' websites, but fewer of them liked using other online places to buy art, like NFT sites or Instagram.
Market Trends in the UK, France, and Germany
In the UK, public auction sales experienced a considerable decline of 12% to $3.1 billion in 2023, yet the nation retained its stature as the third-largest auction market globally. Despite this, its global share dwindled to 12%, marking a 5% decrease from 2019 when sales peaked at $4 billion. Notably, the UK grappled with the downturn in the high-end market, traditionally recognized as one of the foremost global hubs for high-priced artwork sales alongside the US.
In 2023, works valued at $1 million or more constituted 59% of the UK's fine art auction market share (down from 64% in 2022), significantly surpassing France (35%) and China (45%). France maintained its fourth position, holding a 9% share of the market value, consistent with 2022 figures. Following a stellar performance in 2021 with sales soaring by over 60%, the French auction market stabilized in 2022 but encountered a 10% downturn in 2023, with sales declining to $2.2 billion. Conversely, the German market experienced a more modest contraction of 2%, amounting to $778 million in sales.
NFT Market Fluctuations
A website called NFT18.com tracks NFT sales and shows how they went up and down during this time. NFT platforms sell different types of collectibles, not just art, like sports or music items. In 2019, art NFTs were only a small part of the market, but by 2020, they were the most popular. However, since 2021, other types of collectibles have been more popular, making up most of the sales in 2023.
After dropping from 2021 to 2022, the sales of art-related NFTs fell even more by 51% in 2023, reaching $1.2 billion.
Even though the value of art-related NFT sales dropped significantly from late 2021, they still reached nearly $2.4 billion in 2022, which was a 16% decrease compared to the previous year but still way higher than the $20 million market size in 2020. However, following this decline, the value of the art segment decreased even more by 51% in 2023, down to $1.2 billion. Notably, certain art projects, like Jack Butcher's Checks collection, generated over $350 million in sales in just a few months of 2023.
In 2022, the collectibles segment outperformed art, with values rising by 73% to $17.8 billion. However, in 2023, sales in the collectibles segment plummeted to just over $6.3 billion, a 64% decrease from the previous year. Experts believe this indicates that speculative activity in the collectibles segment, which had also affected the art segment, was losing momentum, signaling a gradual decline in its importance.
Evolving Art Market Dynamics
Surprisingly, older art collectors preferred using social media and online places more than younger ones did. Art sales through NFT sites aren't included in the official art market numbers for 2023 because they don't happen in galleries or auctions. However, even though these sales dropped in value, they were still active in 2023, especially earlier in the year.
NFTs, which are digital artworks, became really popular in 2021, but most of the buying and selling didn't happen in traditional art places. These markets were fast-paced and attracted people who wanted to make quick money by buying and selling NFTs. Sales went up a lot from 2019 to 2021, but then dropped in 2022 when the price of Ethereum fell. The market for NFTs became more stable in 2023.
Global Auction Sales 2019–2023
In 2023, the United States, China, and the United Kingdom maintained their positions as the leading auction markets on a global scale. Together, they commanded a substantial 74% share of public auction sales by value, representing a marginal 3% decrease from the previous year. Notably, China's market surged, propelled in part by deferred sales from 2022, allowing it to equalize with the US, with both nations claiming a significant 31% share of public auction sales (excluding private transactions).
Figure 1 Global Auction Sales visualization, data from auction houses, Artory, Artron, and other sources. Photo: Arts Economics
Meanwhile, the US and UK auction sectors witnessed notable declines in value, with the US market experiencing a 7% decrease, bringing it on par with China in terms of market dominance. Despite these shifts, the UK retained its position as the third-largest auction market, maintaining a steady 12% share of the market value (down by 1% year-on-year). France trailed behind in fourth place with a 9% share.
An Overview of Wealth and Luxury Expenditure
At the start of 2024, global tensions and conflicts persist, limiting economic growth to 3.1%, lower than the pre-pandemic average of 3.8%. Despite this, recession fears have eased, inflation is falling, and some regions may cut interest rates, improving economic prospects. Global inflation could drop to 5.8% in 2024, which may boost confidence in the art market.
Lower interest rates could help art sales, especially for high-net-worth (HNW) collectors who increasingly use credit to buy art. In 2023, 43% of HNW collectors used loans for purchases, and a significant portion of their collections are financed by borrowing.
Figure 2 Global Billionaire Population and Wealth (December Totals 2008–2023). ©Arts Economics (2024) utilizing data from Forbes
Luxury markets, including art, tend to withstand economic downturns better than other sectors but aren't immune to disruptions. Wealthier individuals are more likely to keep buying luxury items, and recent wealth concentration at the top has fueled high-end art demand.
Although global wealth fell by 2% in early 2023, it is expected to grow nominally by 7% for the year. Billionaire wealth, which grew sharply during the pandemic, continues to support the art market. Despite some losses in 2022, billionaire wealth increased by 12% in 2023, helping stabilize the art market. This wealth growth is critical for maintaining art sales in 2024.
Regulatory Challenges Amidst Market Diversification
The market downturn from 2022 caused many speculative buyers of art-based NFTs to hold onto their purchases rather than selling them at a loss, leading to a slowdown in resales. Unlike traditional art market resales, which typically occur over decades, art-related NFTs were being resold in a very short period, around 33 days in 2021.
The increasing diversity of buyers and sellers in the art market, along with new ways of creating and trading artworks, have raised new regulatory challenges for governments and regulators. Some of the main regulatory issues in the art market are discussed in Exhibit 1, while Exhibit 2 focuses on the legal framework for the market in China in 2024.
Disclaimer
This report serves for informational purposes only and does not cater to individual investment objectives or financial circumstances. Razvan Chiorean Gallery and its affiliates do not validate the information's accuracy, nor endorse the authors. It does not constitute investment research, a sales prospectus, or an offer for investment activities. The report does not provide legal, tax, accounting, or investment advice.
Source
The Art Basel and UBS Global Art Market Report 2024 by Arts Economics
About the Author
Razvan Chiorean is the published author of Art Buzz News, online content curator and contemporary art documentarist, committed to advancing diversity and accessibility in the art community. With a keen focus on innovation and a steadfast commitment to inclusivity, Razvan strives to unite cultures, serving as a bridge that seamlessly integrates art and innovation, all within the universal language of creativity.
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