No matter how bad things are getting in the everyday world, the 1 percent march on – according to the latest The Art Market report published by Art Basel and UBS
The Art Market report, published annually since 2017 by Art Basel and UBS, is an increasingly strange publication to read. Not because of the many useful sources of art market data it manages to expertly pull together and summarise; nor because of the extensive surveys of art dealers and collectors it conducts, which reveal some of the more complex issues that underpin the international trade and circulation of art. What’s increasingly strange is that, no matter how bad things are getting in the everyday world, the art market seems to be doing just fine.
Yes, there have been downward dips in the market, and 2021 was still a pandemic year, but as the report notes, the global art market largely bounced back after tanking during the first wave of the pandemic in 2020. Global turnover for 2021 was $65.1bn – not quite the historic peak of $68.2bn in 2014, but pretty good compared to the $50.3bn slump of COVID-hit 2020. (And, fiddling around with the figures, this may in fact have been slightly better than 2014, since sales against volume – the total value of all sales against the number of sales – suggested higher average prices per sale.)
And yes, there were winners and losers due to the pandemic and other factors. Art fairs, the champions of art’s In-Real-Life status, were battered most, with visitor numbers down markedly between 2019 and 2021; Art Basel’s own fairs saw falls of 35 percent in Basel, and a crashing two-thirds in Hong Kong, as the pandemic and the deteriorating political situation there put international collectors off. When they returned in 2021, fairs across the world saw a stark reduction in the number of exhibitors compared to 2019. Meanwhile, post-Brexit Britain saw a significant drop in its share of the global market (down from 20 percent in 2020 to 17 percent), though even this was still more than the whole of the EU put together. But globally, auction sales prospered, and, as the whole auction market bounced back, the report notes that ‘by far the strongest rise in values was at the top end of the market’, while among those works selling for more than $1m, ‘the largest increase in share…was works sold for prices of over $10m’. This level of sales, according to the report’s index going back to 2005, is unprecedented.
In other words, even after the 2008 financial crash and a decade of sluggish economic growth across the West, even after the battering of the global art market through the pandemic – even in those circumstances, the market for art is mopping up even more money wealthy collectors have going spare. As the report sets out – and most people have already gathered over the last year or two – there are now a lot more rich people around. Off the back of rising stock markets and asset-price rises, billionaires boomed in 2020 and 2021. Grotesque as it seems, there were (according to the Forbes data the report draws on) 2,657 global billionaires in 2021, accounting for wealth of £13.6tn. Contrast this with the 1,120 billionaires of 2011 (their wealth only a mere $4.5tn) and one can see how wedded the art market is to the ever-rising fortunes of the 1 percent.
That the global art market is riding high on that excess cash however has its own unforeseen consequences. A notable addition to this year’s The Art Market is its discussion of the market for NFTs. While it’s careful to downplay the scale of NFT sales at auction, noting that ‘Sotheby’s and Christie’s sold $230 million in NFTs in 2021 (against gross revenues of over $14 billion)’, it acknowledges that platforms selling NFTs outside the market have created active markets ‘outside of the traditional framework’; taking into account art and ‘collectible’ NFTs, it estimates sales in 2021 of $11.1bn – no small beer for a market that has popped out of nowhere in two years.
NFTs would be a trivial matter for the art market if they didn’t embody the speculative craze driven by cryptocurrency, which is itself a consequence of the asset bubbles of the last decade. There is (substantial) money to be made in these new forms, even if it can’t easily be captured by the art market’s traditional structures. Meanwhile, that traditional market continues its long-term trend towards a more polarised market, with bigger players at the top concentrating bigger sales among fewer, richer collectors, as ‘the [pandemic] crisis increased the divide between the high and low ends of the market, weakening the position of some smaller galleries and those dealing with emerging or less established artists’.
But the preoccupation with NFTs also points to a generational shift starting to make itself felt. Gen Z and millennial collectors surveyed were the keenest to buy art in 2022, while interest in buying digital artworks also increased, and film, video and digital art figured as a greater share of the collections of younger collectors. ‘Boomer’ collectors are getting older, and while they still buy the most expensive art, the tastes of younger collectors – and the forms they buy – are shifting what the art market sells and how it sells it. Whether the traditional structures of the global art market, its galleries, art fairs and auction houses, will continue in their current forms will be a key question in the next years, and there’s a tangible sense of uncertainty in The Art Market about how the pandemic may have created a break in the trends that drove the market unstoppably upwards over the last decade. Interestingly, the report’s survey notes that the pandemic ‘encouraged philanthropic giving’, with a rise in ‘the share [of high-net-worth collectors] intending to donate works to a museum over the next 12 months, from 29% in 2021 to 43%’. Philanthropy it may be, but giving away your art can be a sign that you no longer trust that the market will favour the art you hold in the years to come, and it’s time it went (tax-deductible) into a museum.
Philanthropy is a tricky issue for a part of society that has continued to get richer as income disparities have worsened; in her foreword, head of UBS Wealth Management Europe, Christl Novakovic, observes that an increasing number of UBS’s clients expressed ‘an interest in art collecting with purpose’, the pandemic ‘giving rise to an increased emphasis on sharing, supporting communities and establishing platforms for underrepresented artists’. It is an odd, roundabout admission that the very wealthy may be feeling just a little guilty about their continually accruing privilege. From collectors ‘collecting with a purpose’, sharing and supporting underrepresented artists, to a market that is unravelling at the edges into new forms of digital art and currency, with generational influence shifting in a moment of global anxiety and serious economic uncertainty, the art market that has emerged from the pandemic no longer looks like the one that went in. How, where and in what form art gets made and shown, the kind of market that sustains it, and who it benefits, has never seemed more uncertain.
