The Art Market
2019 Review and What's New in 2020
by Alexandre Coxo, 15 August 2020
In short
- In 2019 the global art and antiques market turned over 64.1 billion dollars, 5% less than in 2018 but above 2017.
- Auctions accounted for 42% of the market and dealers (galleries and art dealers) for 58%.
- The largest markets were the USA (44%), the UK (20%) and China (18%); France was the only one to grow in value.
- Online sales totalled 5.9 billion dollars, 9% of the total.
- For 95% of major collectors the main reason to buy is aesthetic and decorative, although many resell within four years. In 2020 the pandemic accelerated the shift to online sales.
This article summarises the 2019 figures and offers some notes on the state of art in 2020. The data come from the major platforms that analyse the art market: Arts Economics, Artprice, Art Basel, UBS Investor Watch Survey, Artsy and Artfacts.
After a general overview, some data are shown on the 2019 auction, art fair, dealer and online markets.
As in previous years, surveys of collectors showed that the main reason for buying art is aesthetic and decorative. However, many admit to being interested in reselling within 5 years, and major investors remain focused on museum-quality works.
Some factors affecting the wider art environment are also shown, along with examples of how adapting to the online market is helping to face the current crisis.
At the end, out of curiosity, I show the "Decision Tool" offered by Artprice, using Wassily Kandinsky as an example.
Countries' share of the global art market by value in 2019
© Arts Economics (2020)
In 2019, 64.1 billion USD was turned over in art and antiques, a fall of 5% compared with 2018. However, the market stayed above 2017 levels.
The number of sales rose 2%, unlike their value. The auction sector accounts for 42% of the market (down 4%) and the dealer sector for the remaining 58%.
The USA, the UK and China were the main markets, although their share fell by 2%. Despite the slight fall, the USA led sales with 44% and 28.3 billion USD, the second highest figure ever. The UK fell 9% because of Brexit, ending with 20% of the market. In China sales fell by about 10% due to supply problems, putting the country third with 18% and 11.7 billion USD. France was the only market to grow in value, with 7% and 4.2 billion USD.
Auction Houses
In the auction sector, 550,000 lots were sold, generating 26 billion USD. Overall there was a contraction of 17%, but the unsold rate remained stable at 38%, as did the general price index, which rose by 0.48%.
Demand continued to grow for contemporary and post-war art. Auctions were dominated by Claude Monet's Impressionist painting, with one work exceeding the 100 million USD mark in 2019. Jeff Koons set a new record for a living artist with the sale of "Rabbit" (1986) for 91 million USD.
The average value of a painting by ZAO Wou-Ki (1921-2013) (third in the overall 2019 ranking) was 4 million USD, his drawings around 100,000 USD and his prints 5,000 USD. The circulation of a large number of works (paintings, drawings and prints) favours the wide geographical distribution of Zao Wou-Ki's work and the stability of his market, because estimates are less arbitrary and price progression is significant. This does not prevent long-term growth in value: Zao Wou-Ki's price index has risen 1,040% since 2000.
Christie's established itself as the leading auction house, both by value and by number of lots sold, with five results above 50 million USD, all in New York.
The United States stayed ahead with 35% of the market, followed by China with 31%.
Even so, the two English-speaking markets saw a similar contraction of roughly a fifth of their value: the United States fell 22% and the UK 21%.
Continuing the trend of the past five years, the Chinese art market is restructuring. Art sales remained lively in terms of lots offered (134,500), but only 44% were sold, compared with an average of 66% in the rest of the world. Of the ten largest auction houses in the world, six operate only in China, while the other four (Christie's, Sotheby's, Phillips and Bonhams) hold sales in Hong Kong. The Hong Kong market remained stable at 1.37 billion USD in turnover, repeating its 2018 performance.
Among the 550,000 auction records gathered by Artprice and AMMA in 2019, there were many highly profitable transactions. For example, a painting by Daniel Buren sold for 357,500 USD in London, although it had been bought in 1997 for 3,500 USD. And a work on paper by Lin Fengmian reached 1.3 million USD last year in Hong Kong, despite having been bought for 28,000 USD in 1993.
Other results were less positive. A small ink drawing on paper signed by Georges Rouault was resold for 19,000 USD in June 2019 at Christie's, despite having been bought for 403,000 USD in the same saleroom in 1988. In Contemporary Art, Vik Muniz's Still, After Cindy Sherman was resold for 4,400 USD by Sotheby's in July 2019 in an online sale, although it had fetched more than 26,000 USD in 2005 and 40,000 USD in 2011.
The American market stood out for the extraordinary performance of the leading representatives of Abstract Expressionism and Pop Art, while the British and Chinese markets focused more on contemporary work.
Dealers
Dealers in the 500,000 to 1 million USD segment reported the biggest decline (-9%). In contrast, those in the 250,000 to 500,000 USD segment grew by 17%.
The survey showed that 57% of sales by primary-market galleries relate to their top three artists.
The largest increase in volume was in the contemporary art sector: dealers devoted exclusively to contemporary art increased transactions by 20%.
"The widespread popularity of Gardner's works is consistent with the market's current appetite for figurative painting."
Enquiries about artworks at art fairs in 2019
Artsy Data
Art Fairs
Looking at demand in general, Artsy data show that 33% of all artists with works shown at fairs in the first half of 2019 received one or more enquiries. Collectors' interest focused mainly on established artists.
Works by established artists interested 60% of respondents, while early-career artists got 29% of the attention and emerging artists just over 11%. 33.9% of all enquiries made at fairs in the first half of 2019 were about American artists. Even so, demand for works by British, German, Spanish and Japanese artists exceeded supply.
Painting was the preferred medium both in submissions and in demand: 31.3% of the works submitted were paintings and demand was 43.6%. After painting, sculpture was the most sought-after medium, generating 12.6% of enquiries. Interest in three-dimensional works slightly exceeded that in works on paper (12%) and prints (9.9%).
Art fair sales accounted for 46% of gallery sales by value in the year in question, only 2% less than sales made in their own spaces, according to the Art Basel and UBS report The Art Market.
Galleries took part in fewer fairs, an average of four, compared with the usual five since 2016. The 20 most active galleries took part in an average of 14 fairs. The list of frequent fair participants includes many mega-galleries, such as Hauser & Wirth, Perrotin, David Zwirner and Pace Gallery, which have budgets and staff large enough to offset the strains of the relentless global circuit. However, it also includes smaller galleries, such as Rebecca Hossack Art Gallery in London; Galerie Nathalie Obadia, Paris and Brussels; and P.P.O.W in New York.
Among emerging artists, the most attractive to collectors was Alex Gardner, the painter known for images of black figures in surreal, monochrome spaces. Gardner's dominance in the emerging artist category was driven by his solo show at The Hole gallery, which reported selling its entire stock, at prices between 15,000 and 28,000 USD. The widespread popularity of Gardner's works is consistent with the market's current appetite for figurative painting. Painters such as Grace Weaver and Louis Fratino were also among the most sought-after emerging artists at fairs.
Online Market
The online market made 5.9 billion USD in 2019, down 2% on the previous year but representing 9% of sales by value. Dealers in segments below 1 million USD made 12% of their sales by value online. Dealers made 57% of sales to new buyers, and for second-tier auction houses new buyers accounted for 34%.
Most online transactions (77%) connect buyers and sellers more than 1,000 kilometres apart; about 18% were within 500 kilometres, including the 11% less than 50 kilometres apart.
Online sales are increasingly present and, for now, more important for smaller auction houses. Auction houses with sales below 1 million USD made 23% of their sales online, compared with 4% for those with sales above 10 million.
65% of high-net-worth (HNW) collectors did not exceed 50,000 USD online for a single piece. However, a quarter spent more than 100,000 USD and 8% more than 1 million on online purchases.
Millennial HNW collectors were the most regular online users, with 92% buying online. 36% of Gen Y HNW collectors who bought online paid more than 50,000 USD for a work, including the 9% who spent more than 1 million.
Online sales have grown steadily, from 3.1 billion USD in 2013 to 6.0 billion in 2018. In 2019 the online market traded 5.9 billion USD, with most sales below 5,000 USD.
Most dealers (67%) in 2019 expected their online sales to grow over the next five years. And 61% of HNW collectors used Instagram to buy art.
As the traditional auction market faces some difficulties in expanding, online platforms (mainly at low and middle price points) are becoming more popular thanks to greater flexibility and lower operating costs. At the same time, online sales reach a larger number of potential collectors, creating more opportunities to offer products and services such as valuations or data analysis.
Why do HNW collectors buy art?
The reasons for acquiring and keeping works of art vary widely. Collectors surveyed by Art Basel and UBS were asked to rate the importance of a series of purchase factors: aesthetic and decorative considerations, passion and personal expression, supporting artists and culture, social networking, family tradition, social reasons, diversifying wealth, return on investment, status or cultural credibility, and protection against inflation.
The highest rated were aesthetic and decorative considerations, with 95% of all collectors considering them important, including 77% who considered them very or extremely important. 93% of respondents said they were driven by collecting art as a passion or expression of their personality. These two factors ranked highest in every market, regardless of age or gender.
Financial motivations were also important for most collectors, but ranked at the lower end of the scale. Using art to diversify wealth was the main financial motivation in the USA and Asia, while expected return on investment was the main financial driver in France. The high resale rate indicates that, although they identify as collectors for aesthetic or emotional reasons, in reality they see art as an investment. This is supported by the fact that most resales happen within five years of purchase, with the average period just under four years.
As for provenance and authenticity, 40% of collectors rely entirely on the seller. However, 26% used art advisors and 24% another type of expert, such as financial advisors. Only 32% did their own research on authenticity.
Young collectors remain the most hopeful about the art market, with about three-quarters of millennial collectors optimistic about the future of their choices.
The shift online - 2020 or post-pandemic
The market has never been through such an acute crisis. Within days, galleries and auction houses had to cancel in-person sales to comply with the emergency restrictions brought in because of COVID-19. Although slow, the recovery is under way, with a shift towards private transactions and above all online sales. The move from physical to online sales has proved vital for resilience, and several companies have already reported encouraging results.
One of the first results came from the Italian company Finarte, which raised €400,000 from an online photography sale on 17 March. Fifteen days later, the American house Sotheby's raised 2 million USD in a design sale and, on the same day, a further 539,000 USD for a painting by Irma STERN. These figures are new records for Sotheby's online activity. Other results were equally positive for the French online market.
Another example was Tajan's online reworking of its "Féminin pluriel" sale. A lot expected to reach a six-figure result sold well: the painting "Marlène" far exceeded its €200,000 estimate, reaching €374,800. The auction house Millon adopted a new marketing strategy with a series of "single-lot" sales called So Unique. The first sale, on 8 April, went well, with a watercolour by ZAO Wou-Ki reaching €189,800, above its €100,000 estimate, and a canvas by Bernard Buffet sold for €43,550 on 15 April, despite an estimate of €30,000.
These results are reassuring and show that collectors trust online sales. However, this market still faces challenges, mainly related to logistics (authentication, storage, shipping, customs duties, etc.), which need solving if it is to keep growing.
Decision Tool - Artprice
Several platforms provide data on the trends and prices of famous and established artists. Artprice is one of them and recently published an analysis of the prices and quantities of works by Wassily Kandinsky.
In 2019, Kandinsky ranked 103rd overall, with a 42.6% loss in price, even though total turnover was 17,824,762 USD. Most sales took place in the USA.
By mid-2020, turnover stood at 4,567,963 USD, with a total of 62 original lots sold.
The best-selling pieces are prints, with 75% of sales, followed by drawings/watercolours with 16% and other pieces with 9%. However, paintings are the most expensive works, accounting for 83% of turnover.
Read the Artprice article by clicking the button
Number of lots sold
© Artprice.com
Operating in an unpredictable global market has created new challenges, making some businesses easier and others harder. As always, competitive advantage is not based on the quality of production but on the places that allow efficient interaction between buyers and sellers, with online gaining ground both as a means of research and validation and as a safe platform for buying and selling.
In 2019, geopolitical tensions and trade issues dominated the global economy and led to slower global growth. The prospect of a US-China trade war and rising protectionism in the main economies reduced overall investment, and inevitably investment in art. Even so, reduced wealth inequality between nations helped expand the global diversity of the art market.
Most HNW collectors say more than 30% of their works were kept in storage out of sight (general storage, bank vaults or freeports). Millennial HNW collectors bought more and spent more, with an average total spend of 1.5 million a year. Millennials also resell more, with the average period between original purchase and resale under four years.
Besides their motivations, collectors should consider a number of practical questions before deciding to buy, such as delivery logistics, the costs and processes of international shipping, and where and how the work will be stored and cared for.
Despite fluctuations, the sale rate did not fall in 2019, especially for Oil Painting and Contemporary Art, whose turnover is growing against the general trend.
In the view of Thierry Ehrmann, CEO of Artprice, "since 2000, the art market has shown a high level of maturity, withstanding the NASDAQ crisis, the consequences of 9/11, the second Iraq war and an unprecedented financial and economic crisis that plunged the developed world into a long-term low-interest-rate environment, eroding the value of savings, and it is now withstanding a global context of rising geopolitical tensions between China and the USA. Over these last 19 years, the Art Market has managed to adapt, not only avoiding its own collapse but creating a true safe haven for investment, without forming a speculative bubble."
Art Market 2020
Art Basel and UBS report
See the data on the global art and antiques market in 2019.
The report describes the main trends, analysing the performance of different regions, sectors and price segments.
The decline in the auction sector and the shift from public to private sales reflect uncertainty in the main economies. The digital era is increasingly inevitable, with artists presenting their works to collectors directly or through the online platforms of major auction houses or galleries. The running costs and reach of online make it attractive compared with art fairs or in-person auctions, and it is already a significant source of income for small galleries and auction houses.
The pandemic caused the biggest crisis in the history of the modern art market, mainly affecting mid-sized players. Despite many uncertainties, it can be seen as an accelerator of the conversion of the physical market into a digital one, with collectors trusting online sales even for amounts above 100,000 USD.
So far there has been no change in the interests of major collectors, who continue to prefer museum-quality pieces, with aesthetic and decorative criteria as the main ones.
Frequently asked questions
How much was the art market worth in 2019?
According to Arts Economics, 64.1 billion dollars in art and antiques: a fall of 5% on 2018, but above 2017 levels. The number of sales rose by 2%.
What were the largest art markets in 2019?
The USA, with 44% (28.3 billion dollars), the UK, with 20%, and China, with 18%. France was the only market to grow in value, with 7%.
What share of art sales were online in 2019?
Online sales reached 5.9 billion dollars, 9% of the market by value, and most transactions were below 5,000 dollars. 77% of online purchases connected buyers and sellers more than 1,000 km apart.
Why do major collectors buy art?
According to the Art Basel and UBS survey, mainly for aesthetic and decorative reasons (95%) and out of passion or personal expression (93%). Financial motivations also count but ranked lower, and most resales happen within five years of purchase.
Which works attracted most interest at art fairs in 2019?
Those by established artists, with 60% of the interest, against 29% for early-career artists and about 11% for emerging artists. Painting was the most sought-after medium, with 43.6% of enquiries, followed by sculpture, with 12.6%.
How did the pandemic affect the art market in 2020?
It forced galleries and auction houses to cancel in-person sales and accelerated the shift to online and private sales. There were encouraging results, such as Finarte's €400,000 online photography sale and new online records for Sotheby's.
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