Eight Trends In The 2024 Global Art Market
Pearl Lam is a gallerist and entrepreneur and is founder of Pearl Lam Galleries. She is host of The Pearl Lam Podcast and an expert speaker.
The changing tides of the global art market have been laid bare in the UBS Art Market Report 2024 by Arts Economics. According to the report, globally, art sales have slowed, save for China where they have increased by 9% to a staggering $12.2 billion. Online sales increased worldwide too, but the highest-priced art deals still tend to happen offline.
Here are some of the most interesting trends identified in the report that I believe can help provide an outlook on the current global art market:
1. Sales In The Global Art Market Slowed In 2023
With rising inflation and rising interest rates, 2023 saw a slowdown in art market sales. The report shows that, globally, sales fell by 4% year-on-year to about $65 billion but remain higher than the pre-pandemic level of $64.4 billion. When interest rates are high, there are typically more favorable diversification opportunities for investors within the financial markets, and so I think it follows that those buying art as investments are allocating less of their portfolio to art.
2. China Is Rising
One of the biggest findings in Arts Economics' report is that the United Kingdom has been ousted from its status as the world’s second-largest art market by China. China now accounts for 19% of global art sales, with the U.K. falling back to 17% of global sales.
The Chinese are gradually becoming more interested in collecting due to various factors, including more frequent art fairs, such as Art Basel Hong Kong and new museums, like the new Centre Pompidou Museum in Shanghai, generating wider interest in art and art collecting.
However, I don't think the methodology used in collecting the data is sufficiently accurate to make the statement that, while undoubtedly larger, China has become a more "important" market than the U.K. In my view, I would estimate that China and the U.K. are probably more or less equal in size—for now.
3. The United States Remains On Top
According to the report, the U.S. remains the largest art market, accounting for 42% of global art market sales, even with an overall reduction in sales value of 10%. The difference can likely be accounted for by a reduction in higher-priced artworks sold at the very top of the market. This is in juxtaposition to the records broken in 2022 like Christie’s $1.6 billion auction of Paul Allen’s collection.
I also believe the data likely understates the U.S. market size by not including Americans buying in other markets such as the U.K. and Hong Kong. In my view, with this included, the U.S. probably accounts for something more like 50% of art sales globally. China may be rising, but in 2024, you cannot understand the art market if you do not follow the U.S. market.
4. The Highest Priced Art Remained Offline
While online sales did increase, Arts Economics showed that 95% of those sales were for artworks valued under $50,000. The report finds that the online market has yet to make any significant impact on the high-end of the art market. For the most part, the most valuable artworks can still only be found in galleries, auction houses and art fairs.
Furthermore, 30% of dealers said that art fairs were their greatest source of new buyers. And in my experience, buyers like seeing the art that they buy in person. Even those who do buy online tend to acquire what they have already seen in real life.
5. But Online Art Sales Are Growing
Despite an overall slowdown of sales in the global market, online sales increased by 7%, reaching $11.8 billion, which is double what they were in 2019. Online art sales now account for 18% of the art sector’s profits worldwide. Covid accelerated the process of artists and galleries adopting online tools, but with much of the adoption complete, I predict that online art sales will hold around their current level going forward.
6. Dealer Sales Slowed
Another finding is that sales by galleries and art dealers slowed globally by 3% after two years of consistent growth. Again, I think the fact disguises an underlying trend: Smaller galleries and dealers actually saw growth, while those at the higher end of the market saw some decline in sales.
In my view, the middle market will continue to have difficulty. High levels of wealth amongst the 1% and high financial markets will always support high-end sales, while the lower end of the market tends to consistently generate interest from speculators and as an entry point for investors.
7. Dealers Reported Higher Profits
Despite high-end sales slowing, 49% of dealers report that their sales were higher in 2023 than their pre-pandemic level in 2019. Out of these dealers, those with the highest turnover saw the largest increase in sales, with 72% of high-end dealers reporting a rise in sales. Continued rises in the financial markets during this period saw high-end collectors continue to buy art with the liquidity amassed from the increase in their financial portfolios.
8. Public Auction Sales Fell In 2023
Although 2022 was a record-breaking year for public auction sales, 2023 saw sales fall by 7%. I see this as attributable to there being a lack of high-end art coming to the market in 2023, combined with generally lower interest in art as an alternative asset class for investment purposes when high interest rates continued to offer more liquid investments elsewhere.
Summary
The outlook for the global art market in 2024 is a tale of two halves. Political and economic volatility means that the large U.S. and British markets may face further headwinds in 2024, while China will likely continue to deliver outsized growth in sales.
Yet, I have hope and continue to see the art sector as a place of extraordinary creativity and reinvention. Away from the year-on-year headlines, I believe that the long-term trendline in the art market is a positive one.
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Pearl Lam is a gallerist and entrepreneur and is founder of Pearl Lam Galleries. She is host of The Pearl Lam Podcast and an expert speaker.
