Canada
Ireland
Art Market Review 2023
A review of the Art Basel and UBS Global Art Market Report 2024
Following two years of growth in the aftermath of the COVID pandemic, the global art market stalled in 2023. According to the Art Basel and UBS Art Market Report 2024, the market contracted by 4% in 2023 from $67.8bn to $65bn.¹ Despite the contraction, this takes the global market to close to, but significantly still above, the pre-pandemic level of $64.1bn (or $64.4bn when adjusted for inflation) reached in 2019.
There are several factors driving the 2023 performance and once again the Art Basel and UBS Art Market Report provides a comprehensive and illuminating insight into the economic and geopolitical dynamics of the marketplace. Now in its eighth edition, the report remains the pre-eminent source for its assessment of the key trends and developments across the art market.
Uncertainty impacts market performance
Against the backdrop of continued political and economic uncertainty, the 2023 contraction was arguably not as severe as could have been expected. In addition to the on-going war in Ukraine, towards the end of the year international attention turned to the escalation of tensions in the Middle East following Israel’s invasion of Gaza. These events further impacted the global post-COVID recovery, hindering the fall in inflation and keeping interest rates high.
All the major art markets aside from China reported a notable decline in sales. A key driver in this reduction was the low number of sales for the highest value works priced at $10m and above. The 2023 result was however offset by a 4% increase in volume from 2022 with 39.4 million transactions, including notable sales numbers from both the dealer and auction sectors at the lower end of the market.
"All the major art markets aside from China reported a notable decline in sales. A key driver in this reduction was the low number of sales for the highest value works."
In 2021 and particularly 2022, sales at the upper end of the market had been significant in buoying the post-pandemic market. Unsurprisingly the climate in 2023 impacted both buyers and sellers: an absence of vendors willing to sell blue-chip works deeming it an inopportune time to bring art to the market, and buyers more selective and cautious in making purchases at the highest end.
The Chinese market overtakes the UK
The three major hubs of the US, China and the UK continued their market dominance with a combined 78% share of art sales, down from 80% in 2022.
The US maintained its position as the leading global market with 42% of sales by value (down from 45% in 2022) equating to $27.2bn. The 2023 figure was just below the pre-pandemic level of 2019, but 10% down on the historic high of $30.2bn in 2022. The result reflected the wider impact of reduced top priced sales which New York, the world’s leading centre for buying and selling high value works, was especially affected through shifts in this price segment.
China was the surprising success story of the year, surpassing the UK to become the world’s second-largest market once again with a 19% share of sales (up from 17% in 2022). Total sales in China and Hong Kong increased by a significant 9% to $12.2bn (up from $11.2bn), as the territory was finally freed from the government’s zero COVID policy. The lifting of restrictions at the start of the year saw art fairs return to the calendar and auctions post particularly strong results as the backlog of high quality lots came to market – making China the only centre to record growth in the $10m and above level. The surge experienced following the reopening of the economy did however cool in the second half of the year, suggesting the result may have been a reflection of collectors’ post-pandemic panacea rather than an indication of a new Asian market resurgence.
The UK slipped to third position with 17% of sales (down from 18%) decreasing by 8% to $10.9bn in 2023. As with the impact on New York, London’s position as a leading centre in high-value sales saw the UK dramatically hit by the reduction in $10m plus auction lot sales. The wider numbers however paint an even more sobering picture, including an alarming 35% reduction in sales volume and a 16% fall in imports to $2.3bn from $2.8bn in 2022. The impact of Brexit related issues, including VAT and customs checks for all EU imports, continues to create challenges for the UK market beyond simply its ability to attract the most expensive works of art for sale.
Decline in auction results
Following the impressive auction performance in 2022 was always going to be a tall order and 2023 proved to be a year of more subdued results, particularly at the highest level of the market. In 2022, 24 works sold at auction above $50m including an unprecedented six lots selling above $100m.2 In 2023, 6 works sold in excess of $50m of which two breached the coveted $100m threshold.3 The top 100 lots sold at auction totalled $2.4bn, reflecting a dramatic 41% drop from $4.1bn in 2022.
While the number of headline-grabbing sales at the very top end of the market were limited, it still reflected a marked improvement on the pandemic impacted period, where in 2020 for example, no artwork sold at auction reached $100m and just two works sold above $50m.4
A key driver in the high-end auction results of 2021 and 2022 were exceptional single-owner sales which mitigated any wider market slow-down. The unprecedented sale arranged via Christie’s New York in November 2022 of the collection of billionaire Microsoft co-founder Paul Allen, saw 155 paintings and sculptures reach an extraordinary $1.62bn of which 5 works alone each exceeded $100m. While in November 2021 and June 2022 Sotheby’s New York sold the collection of real estate tycoon Harry Macklowe and his wife Linda, with the combined sales realising $922.2m – prior to the Allen sale itself a single-owner auction record.
Of the ten highest lots of the year, eight were sold at New York auctions and two in London.2 The highest selling lot of the year was Pablo Picasso’s Femme à la montre (1932) which sold at Sotheby’s New York in November for $139.4m. The painting depicts Picasso’s lover and muse Marie-Thérèse Walter and was painted shortly after their secret affair was made public. The portrait was the flagship lot from the sale of the American philanthropist Emily Fisher Landau’s collection which collectively realised $400m. The work is the second most expensive painting by Picasso to be sold at auction after Les femmes d’Alger (Version ‘0’) sold for $179.4m in 2015.
The second highest work sold at auction, and the only other lot to exceed $100m during the year, was Gustav Klimt’s Dame mit Fächer (Lady with a Fan) 1917. The artist’s last portrait, the painting depicts an unknown woman surrounded by peacocks and flowers. Sold at Sotheby’s London in June for £85.3m ($106.8m), the work set an auction record for the Austrian artist and became the most expensive lot sold at a European auction house. The painting reflected the incredible increase in Klimt’s market appeal, with the same painting previously being sold at auction in 1994 for $11.6m. Indeed, Klimt was the only artist to feature a second work selling above $50m during the year, with his seascape Insel in Attersee (Island in the Attersee), dateable to around 1901, realising $53.2m at Sotheby’s New York in May to record the fifth highest auction lot of the year.
Uncertain outlook for 2024
As 2024 unfolds, uncertainty continues to cast a shadow over the financial markets. The alarming tensions between Israel and its immediate neighbours leaves the very real possibility of a much wider conflict engulfing the Middle East. While in Ukraine, the war with Russia continues with appalling casualties on both sides and an increasing inevitability of a much-prolonged conflict.
As with other financial sectors, the art market is not impervious to the impact of such events. However, encouraging economic indicators in some leading international countries, including lowering inflation and reductions in interest rates, provides a degree of cautious optimism.
The art market will certainly be hoping that such factors help to stimulate both buyer and seller confidence. As the first quarter of the year closed, results at auction proved inconclusive. With an absence of stellar works brought to market, the highest value lot sold to date is René Magritte’s L’Ami Intime (1958). Auctioned at Christie’s London in March, the work realised £33.7m ($43.1m) just over 10% above its low estimate (£30-50m, $38.4-64.0m).2 A notable fact is that the 10 highest value results of the year were all recorded in London, by Christie’s (six lots) and Sotheby’s (four lots), with the top five lots each selling in excess of $10m: a positive result, raising hopes for the UK market’s recovery during the remainder of the year.
1 Unless stated otherwise, all figures quoted are from the Art Basel & UBS Art Market Report 2024
2 Artnet Price Database Fine Art and Design
3 See Art Market Review of 2022
4 See Art Market Review of 2020 and Art Market Review of 2021