The ways that buyers access and purchase art have changed significantly over the last 20 years.
In 2016, the most recent year for audited results, global art sales were between US$45 and US$57 billion. Art fairs alone generated US$13.3 billion in sales in 2016, up 5% year-on-year and 57% since 2010, according to the 2017 Art Base/UBS Art Market Report.
“The market peaked in 2014 at $68.2 million, beyond the peak in 2007 and more than doubling in size within a decade,” states the 2017 Art Basel/UBS Art Market Report. “While the US managed to keep the momentum, weak sales in China and continued stagnation in Europe led to an inevitable slowdown of sales in 2015, as certain sectors cooled and it became harder for the market to keep up the pace.”
They included the May 2017 sale of Jean-Michel Basquiat’s 1982 painting of a skull for US$110.5 million, and the November 2017 sale of Leonardo da Vinci’s Salvator Mundi for a whopping US$450.3 million. New York Times reported that robust sales at Christie’s in 2017 saw the auction house achieve sales of $7.3 billion, a 26% increase on the previous year. Rival auctioneers Sotheby’s and Phillips have also reported strong growth for 2017.
Fairs have become one of the key channels for sales for artists and galleries alike, both through the events themselves and through the contacts they generate for future sales. While there is some evidence of a concentration of exhibitors in some of the larger fairs, they are generally regarded as critical for all levels, particularly for new and emerging artists and galleries that need the fair platform to contextualise the artist and the artwork while simultaneously offering international exposure.
Attracting buyers’ attention and getting them physically in front of the artists is still seen as the key to success, and a reason why many artists and galleries maintain their presence.
Post War and Contemporary Art was the largest sector of the fine art auction market in 2017, accounting for 46% of its value and 45% of the lots sold. Sales reached a total of US$6.2 billion in 2017, increasing 12% year-on-year. The Post War and Contemporary sector has had the most dramatic and volatile growth of all sectors over the last ten years. Sales boomed up to 2007, with auction values rising by more than 450% from 2003.
- Sales in the global art market reached $63.7 billion in 2017, up 12% from 2016.
- The volume of sales (number of transactions) grew more moderately than values, at 8% year-on-year.
- In 2017, aggregate sales by dealers accounted for a larger share of the market, at 53% by value, with auction sales accounting for 47% (up 4% from 2016).
- The three largest markets of the US, China and the UK accounted for 83% of total global sales by value.
- The US was the largest market worldwide, accounting for 42% of sales by value, with China in second place (21%) and the UK the third largest market with 20%.
- Sales in the major art markets all advanced year-on-year in 2017: in the US by 16% to $26.6 billion; in China by 14% to $13.2 billion; and in the UK by 8% to $12.9 billion.
- Dealer sales in 2017 reached an estimated $33.7 billion, up 4% year-on-year.
- Dealers with turnover below $500,000 saw a decline in sales on average of 4%, the second year of losses in this segment.
- For dealers at the very highest end (sales over $50 million), sales growth was strongest at 10%, although this was only around half the growth rate reported for this segment in 2016.
- The number of gallery closures has varied considerably, peaking in 2009 and falling in recent years. Gallery openings have declined steadily over the last decade, with the number of new galleries established in 2017 around 87% less than in 2007.
- While the ratio of gallery openings to closures in 2007 was 5:1, this has declined rapidly since then, dropping to 0.9:1 in 2017, that is, more closures than openings.
- According to the dealer survey, the three biggest issues facing dealers in 2018 are: finding new buyers; the economy/demand for art and antiques; and participation at fairs.
- Sales at public auction of fine and decorative art and antiques reached $28.5 billion in 2017, up 27% year-on-year.
- The US and China dominated auction sales with a combined 68% share (the US with 35% of sales, China 33%, and the UK 16%).
- From 2007 to 2017, nearly all segments up to $1 million declined in value, whereas the market for works priced over $1 million grew. The biggest increases were at the very highest end, with the value of sales of works sold for over $10 million increasing by 148% over ten years, and 125% year-on-year in 2017.
- Post War and Contemporary art was the largest sector by value in 2017, accounting for 46%, followed by Modern art (27%).
- All of the fine art sectors increased in value year-on-year, including a 12% increase in the Post War and Contemporary sector to $6.2 billion, with sales of the work of living artists advancing by 19% to $2.6 billion.
- Sales in the European Old Masters sector rose 64% year-on-year to $977 million, however, this uplift was due to the sale of the Leonardo da Vinci painting for $450 million at Christie’s in the US, without which sales would have fallen 11%.
- The global online art and antiques market was estimated to have reached a new high of $5.4 billion in 2017, up 10% year-on-year and accounting for 8% of the value of global sales.
- The online art market has increased substantially in size over the last five years (by 72%), and its share of total art market sales has also edged up from 5% in 2013.
- Online sales have been a key method to access new buyers: dealers reported that 45% of their online buyers were new to their businesses in 2017; 41% of those buying online at second-tier auction houses were new buyers; and in top-tier houses they averaged over 40%.
- Most of the traditional offline dealers and auction houses surveyed in 2017 recognised the online channel as a key area of growth over the next five years.
- A survey of (high net worth individuals) HNWIs in the US by UBS and Arts Economics in 2017 revealed that 35% were active in the art and collectibles market.
- The survey indicated that the most common price range for buying works was less than $5,000 (79% of respondents), and 93% reported that they most often bought at prices less than $50,000. Only 1% of respondents bought at prices in excess of $1 million.
- The most frequently used channel for purchases was a gallery or dealer, with 66% of the sample having used them to purchase art.
- 11% of respondents had used credit or loans to purchase works of art or objects in their collections.
- Only 32% of collectors felt that the expected financial return on their investment was important, although this was higher (at 47%) for those with wealth over $5 million. The majority of the collectors surveyed (86%) reported that they had never sold a work from their collection.
- Sales to private collectors dominated the dealer and auction sectors, accounting for 66% of dealers’ sales in 2017 and 64% for second-tier auction houses.
- There were approximately 310,685 businesses operating in the global art, antiques and collectibles market in 2017, comprising 296,540 in the gallery sector and 14,145 auction houses.
- The art market directly employed an estimated 3 million people in 2017, stable from 2016.
- It is calculated that the global art trade spent $19.6 billion on a range of external support services directly linked to their businesses, supporting a further 363,655 jobs.
- The largest area of spending, although only incurred by dealers, was on art fairs, which represented 23% of the total at $4.6 billion, an advance of 15% year-on-year. The second largest area of spending was on advertising and marketing, which totaled $2.8 billion.
A Snapshot of Africa:
- According to Deloitte, rising global demand for African contemporary art and improved art market infrastructure is likely to increase the demand for Art and Finance related services and initiatives in the African art market, supported by investment in art education, awareness raising, and capacity building.
- The African modern and contemporary auction market has seen steady growth since 2014, but sales have accelerated in 2017 as Sotheby’s launched its first African modern and contemporary art sale in May 2017 in London.