The art market on a global scale traversed through tumultuous "waters" in 2023 with auction sales in the Western hemisphere down from the previous year, alongside a noticeable absence of marquee estates going under the hammer.
That said, according to a recent report released by Art Basel and UBS, the art market's value in 2023 has only dipped by 4% with its evaluation at $65 billion. In addition, this number remains greater than the previously reported pre-pandemic estimation for 2019 at $64.4 billion.
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Breakdown of Global Art Market Value for 2033
The author of the report for last year, economist Clare McAndrew, told Art News that the decline was due to a variety of factors comprising soaring interest rates, pressures from inflation, and the mounting geopolitical instability across the world, all of which slowed down sales.
He added that the top end of the market, which concerns pieces that sell for over $10 million, was most affected last year.
McAndrew also said that this "slowing down" is expected in light of the "post-COVID bounce" and that this dip is "much more normal" considering the circumstances, at least as compared to the enormous contraction that occurred in 2009 and 2014's global art market.
Alongside fewer auctions of eight and nine-figure artworks in 2023, the economist said that rising business costs also acted as a notable obstacle for last year, as well as the increase of the already high-interest rates at the top end.
Because of these trends, most dealers have shifted their approach from focusing on sales to profitability and from branching out to building a more sustainable operation.
As for regional dynamics, the report said that the United States remains the global leader in terms of the art market with its 42% share, despite experiencing a year-on-year dip of 3%.
In a surprising turn of events, China swung past the UK and took its place as the second largest market on the global scale, holding a 19% share.
This 9% increase piling onto an estimated $12.2 billion value, was mostly due to the country's loosening pandemic restrictions, an auction scene supplied by a backlog of previously halted sales, and the launch of new art fairs in Asia.
Falling to the third place, the UK held a 17% market share in 2023 as it accounted for an 8% dip to an estimated $10.9 billion. The report attributed this decline to the diminishing high-value evening sales that are usually held in London and New York.
As for France, it only accounted for a 7% share of global sales, putting it in fourth place.
"Overall," Art Basel CEO Noah Horowitz said in the report, "the reversal of trend at the high end of the market after years of compounded acceleration was one of the defining features of the art business last year, as it also creates an opening in the market for exciting new trends and narratives to emerge."
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2023's Global Art Market Trends
In terms of trends, the report said that only 29% of art dealers' revenue was from art fairs, which is a 6% decline compared to 2022's figures but still an improvement from the COVID-era low of 2% in 2021.
Established dealers, in particular, are more hopeful concerning market developments in 2024, with the report saying 50% of them are expecting increased revenue in art fairs. On the other hand, only 39% of the dealers from the lower financial brackets believe art fair sales will increase.
As for online sales, there had been a 7% increase which overall amounts to $11.8 billion. This cements the increasing value that digital platforms provide the art market in terms of sales despite technically being down compared to 2021's reported $13.3 billion intake, as it still accounts for double that of 2019's figures and even before that.
According to the report, the majority of online art sales were facilitated through dealer-owned platforms and websites.
In 2023, NFTs were still occupying the interest of the art market, despite the significant decrease in art-related sales outside of said market as it exhibited a significant increase as compared to pre-pandemic figures.
All in all, the report said that art dealers across the entire spectrum are cautious yet optimistic for 2024, with 36% of them expecting an increase in sales and only 16% anticipating a dip.
That said majority of dealers are concerned about the mounting uncertainties brought on by political and economic issues, as well as by the increasing costs of maintaining business relationships and art fair operations.
