2024-05-12 03:45:00
Certain gray clouds have clouded the art market, after two years of sunshine as radiant as those painted by Vincent van Gogh. This is reflected in the numbers collected in The Art Basel and UBS Global Art Market Report 2024. It shows that sales decreased by 4% compared to 2022 and stood at $65 billion, a figure even higher than that of 2019 (64.4 billion). A drop in sales is also recorded in the Hiscox Contemporary Art Report, although in this case only transactions at auctions of works created from 2000 are taken into account. Specifically, the decrease in this case was 17% , from 1.5 billion dollars in 2022 to 955 million in 2023. Despite this, it is 26% more than before the pandemic.
José Luis Guijarro, director of the master’s degree in Art Market and Related Companies at the Nebrija University, assures that “for the last 15 years, the market has been moving between 60,000 million dollars and 70,000 million dollars. With some fluctuations due to issues such as the pandemic.” In his opinion, despite the “slowdown” of 2023, there are no symptoms of saturation or fatigue in the market, “what happens is that there is a complex macroenvironment with political, social and war circumstances that make the consumer think before to invest in art.” And he points out the lower sales of high-value works as one of the factors that explain the decline.
A similar opinion is provided by Clare McAndrew, author of the UBS report. “In 2022, the high-end of the market drove growth and those countries that focused on high-end sales, such as the United Kingdom and the United States, performed well. China, for its part, went through a very difficult period due to being blocked for much of the year. In 2023, this situation was reversed as sales slowed down at the top of the market: the American and British markets suffered a decline, while the Chinese market, which recently opened, experienced a rebound in activity in the first half. So the slowdown was slightly less dramatic than it would have been, but still somewhat inevitable, as sales slowed at the high end after strong growth in that segment during the two years after the coronavirus,” he responds by email. electronic.
Regarding how the global economic situation influences the purchase and sale of works of art with a high price, McAndrew assures that, in uncertain or bearish periods, lower financial confidence can often negatively affect the acquisition of luxury goods and other objects. non-essential. “The results of the collecting research carried out in 2023 were that a significant proportion of HNW collectors [personas con alto poder adquisitivo por sus siglas en inglés] “It used leverage to build its collections, so rising interest rates could also have had a negative effect on spending, making the cost of using credit to buy significantly higher,” he adds.
Increase the number of transactions
The “slowdown,” as McAndrew calls it, in the higher-priced segment is contrasted with the “low, positive growth” at the bottom of the market. This circumstance explains that, despite the decrease in the money moved, transactions increased by 4%, to 39,400,000. “In 2023, as is usual, the vast majority of works, specifically 91%, were sold for less than $50,000, while less than 1% were for more than a million,” he says.
Many of these works for which several million euros are paid are sold at prominent auctions, the result of which “can change the outcome of the market from one year to the next.” And he gives as an example that of the collection of Paul Allen, co-founder of Microsoft, which closed in November 2022 for 1,622 million euros. A figure that Christie’s, the firm where it was carried out, takes from its accounts when comparing its results for that year with 2023. Even without taking into account the high amount, the total sales of the house Auction sales in the art and luxury categories fell 7% last year, to $6.2 billion. Guillaume Cerutti, executive director of the company, explained, when presenting the results, that “a challenging macroenvironment and the contraction of the art market explain” the lower collection.
A decline that has also occurred in sales of contemporary art at auction, according to the Hiscox report. “We see a slowdown this year, but because right after the pandemic there was a brutal increase in everything that was sold through auction. We are at levels more similar to pre-pandemic levels,” says Eva Peribáñez, director of the art and private clients division of Hiscox Spain. As in art in general, the price of the works also plays an essential role in the sales volume of contemporary art. “In this type of auction, the segment that is pulling is that of young buyers, who acquire newer artists, from their generations, with pieces of lower value. So when we talk about volumes in euros and dollars of what is sold it is lower.”
Art as an investment
Among buyers, Peribáñez differentiates two types. On the one hand, collectors, who buy “for the love of art, to enjoy it or because it gives them positioning within society”, and who tend to prefer “more recognized and better valued artists”. On the other hand, those who buy as an investment. “In contemporary art, especially when we are talking about emerging artists, is where that profile is seen the most.” In his opinion, among “the new generations that are jumping on the bandwagon” there are those who “possibly buy because they see it as a safe value,” waiting for when the artists become established and have greater recognition, the “value of their works grow.” “Within the art market, in the contemporary market, I would say that this is where purchase and sale transactions as an investment come into play the most,” he adds.
In this regard, Guijarro is forceful when he states that “contemporary art is not a good investment. “It’s pure speculation.” “It can raise the price and reputation of the artists we call emerging. But the works you have bought now will not be worth more in the future. “People will want what that artist does in ten years,” he maintains. And he says that there are “companies that are dedicated to investing in art” and do not work with recent works “because it is seen that it is a lottery.” For him, the “safe haven values, gold in this market, are Picasso, Monet or Frida Kahlo. “Art history that is not going to change.”
It is precisely a work by Picasso, as can be seen in the infographic above, that tops the list of the ten most expensive paintings sold at auction in 2023, followed by one by Gustav Klimt and another by Claude Monet.
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