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Millennial collectors lead art market sales, spending six times more than Boomers, while female collectors spend more than men, reveals UBS Investor Watch and Arts Economics survey.
Global art market sales reached an estimated $64.1 billion in 2019, a decrease of 5% on 2018, with contraction primarily at the top end, returning the market to just above its 2017 level. In contrast, the volume of global sales reached its highest level in a decade, growing by 2% year-on-year to an estimated 40.5 million transactions, says the fourth edition of the Art Basel and UBS Global Art Market Report. The report is published by UBS and Art Basel and is authored by renowned cultural economist Dr Clare McAndrew, with integrating strands of research from UBS.
Millennial collectors were found to be the most active buyers and spent the most, averaging a total expenditure of $3 million over two years, more than six times the spending of Boomers, it says.
Female collectors, although fewer in number had a higher average level of spending than men, with a substantial 16% having spent over $10 million in the last two years. The female collectors surveyed also had larger collections than men on average, with one-third exceeding 100 works, says the report.
The key findings include:
• Leading markets: The US retained its position as the largest market globally accounting for 44% of the market share, stable on 2018. Despite the uncertainty surrounding Brexit, the UK held its position as the second-largest market with a share of 20% (a decrease of 9% year-on-year). China remained the third-largest art market at 18% (a decrease of 1% year-on-year).
• Global wealth and art buyers: The report includes the results of a survey of 1,300 high-net-worth collectors carried out in 2019 by UBS Investor Watch and Arts Economics across seven markets: US, UK, France, Germany, Singapore, Taiwan and Hong Kong.
• Online sales: After more than five years of continuous growth in sales, the online market slowed in 2019 with sales estimated at $5.9 billion, a decline of 2% year-on-year, yet maintaining a 9% share of global sales by value. The UBS Investor Watch and Arts Economics HNW survey, showed nearly half (48%) of the collectors used online platforms to purchase art either often or always. Millennial collectors were the most regular users of the online channel, with only 8% having never bought online. Although 65% of HNW collectors had not exceeded a price of $50,000 online for an individual work, one quarter had spent more than $100,000 and 8% had spent over $1 million, double the share that had spent at that price level in 2018.
• Auction figures: Sales at public auction reached $24.2 billion in 2019, down 17% after two years of consecutive growth. Auction sales declined by double-digits across all leading markets: the US, the UK and China. The slowdown was largely supply-driven, with a lower number of very high-priced lots coming up for sale. However, France saw sales rise by 16% to over $1.6 billion. Private sales also increased substantially, with all of the major auction houses posting double-digit year-on-year gains in this category.
• Dealer figures: Sales in the dealer sector increased 2% year-on-year, to an estimated $36.8 billion in 2019. The moderate growth in aggregate sales continued to be driven by the high end of the market. Finding new buyers was the biggest challenge cited by dealers in 2019.
• Art fairs: Art fairs remained a central part of the global art market, with aggregate sales estimated to reach $16.6 billion in 2019, 45% share of the total value of global dealer sales. 15% of sales were estimated to take place pre-fair ($2.5 billion); 64% during fairs ($10.6 billion); and 21% were made after the fair as a direct result of participation ($3.5 billion).
• Gender issues: The report again includes a review of artist representation and gender issues, revealing an average share of female buyers in the dealer segment of 36%, an increase of 9% in share on the figures reported in 2018. The representation of female artists by galleries working in the primary market rose 8% year-on-year to 44% of the total artists represented, while their share of sales also increased from 32% in 2018 to 40% on average in 2019.
Paul Donovan, Chief Economist, UBS Global Wealth Management, said: "The art market often mirrors the trends and economic developments we see in wealth creation. The growth of millennial and female spending power today is part of that. But even economists must admit that there is more to life than economics. True collectors are driven by passion and an appreciation for quality. Art pays emotional dividends, enriching lives in a way that GDP can never capture."
Clare McAndrew, Founder, Arts Economics, said: "While sales in the art market have often shown great resilience to events in the wider economic and political context, we have also seen that in periods of uncertainty, vendors are often enticed into the relative security and confidentiality of private sales. This appears to have been the case once again in 2019, with an increase in such sales by major auction houses and a corresponding increase in global market share by dealers. International cross-border flows of art currently also face a range of opposing forces, from increasing trade regulation and tariffs, to the drive to purchase more locally to reduce the art market’s impact on the environment. The globalisation of the art market has been the key to its expansion over the last 20 years, reducing its downside risk through the support of a more diversified base of buyers and sellers. While these tendencies are unlikely to be challenged in the short-term, rising tariffs and regulations that impede cross border sales may have a negative effect on the market’s growth in future."
Noah Horowitz, Director Americas, Art Basel, said: "Clare McAndrew's global art market report is once again essential reading for our industry. In this latest edition, she reveals that while the overall market cooled in 2019 - driven by a notable easing of inventory and sales at the highest levels of the auction sector - considerable resiliency remained: individual markets in Europe were up despite the challenges of Brexit; the dealer sector posted incremental gains, with the majority reporting stable or growing turnover; and private sales at the major auction houses grew considerably. McAndrew's study also offers insightful new analytics on art fair sales channels, while shedding light on fascinating emergent trends within the online sphere and mapping a granulated picture of global collector tendencies."
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