Global Art Market Trends
By Miguel Bermudez
The much-anticipated Art Market Report delivered by The European Fine Art Fair (TEFAF) has been greatly improved. Through distilling a myriad of numbers, one can uncover some specific trends of interest for art dealers and for the future of art collecting.
Prof. Dr. Rachel A.J. Pownall, TEFAF Chair- Art Markets at the School of Business Economics at Maastricht University has compiled this comprehensive overview of the world’s art market. With a 29.5% share of the world’s market, the United States continues to be the single largest art market in the world. The U.K. with 24% and China with 18% follow closely.
The revelation of hidden offshore accounts through the Panama Papers, together with the volatile political situation where economic disparities are being highlighted worldwide are creating an interesting shift towards privacy and opacity. Collectors are returning to art dealers to sell artwork and to secure anonymity, scholarly advice, and stability.
Global art market sales in 2016 were estimated to be $45 billion, compared with an estimated $44 billion in 2015, an increase of 1.7%. Within these numbers, there is a seismic shift in sales’ channels. Europe as a continent is the largest art market with total sales of over $20.5 billion, followed by the Americas with $14.5 billion, and thirdly by Asia with almost $10 billion.
Dealers share of the global market grew 20% from 2015 to 2016, while auction sales declined nearly 19%. Auction houses have seen their business shrink during 2016 as business moves to both private sales – through the auction houses themselves, and private art dealers. Auction sales volumes were declined 41% in the US, 13% in Europe and 1.6% in Asia year over year.
Since the amount of material consigned to auction has decreased, sellers are either keeping their trophy pieces for a later day or are now shifting their business to dealers and galleries. The growth of business for dealers was a significant 20% in 2016, while Auction houses sales declined nearly 19% during that period.
Auction houses conducting private deals are also part of this growth. “Buyers are embracing the support, transparency, and discretion that dealers and galleries provide. Reputation is everything: art fairs remain a vital channel for client relations, and over 70% of dealers report actively encouraging a strong work ethic in their staff”.
China has remained the country where a significant amount of art is acquired at auction. Local art dealers have yet to gain the trust, tradition, and reliability that their European and American counterparts enjoy. The European market has a very long history of supporting a large and vibrant dealership sector.
China is the only significant market where antiques have greater sales when compared to Postwar-Contemporary, Ancient Art, Modern Art, and Design. Sales of antiques have slowed in Europe, but more predominantly in the United States. Collectors’ tastes are changing and the trend does not seem to have found a sustainable base.
The importance of art and antique dealers has increased particularly in the UK. A very small number of dealers capture between 80 and 90% of sales; defined by sales at auction. These dealers are Agnew’s, Colnaghi and Vokins. Since the sales of art and antiques in the UK are primarily for export, it is reasonable to expect declines in the coming years given the exit of the UK from the European Union.
Switzerland has experienced a very rapid growth in the art and antique trade. Imports were around $0.5 billion in 1995 and increased significantly to over $2.0 billion in 2016 “The large trade flow into Switzerland is in part due to the financial opacity that Switzerland offers collectors throughout the world”. Sadly, it has been reported that over 1.2 million works of art are estimated to be held by Geneva Free Ports (2). These artworks are stored, bought, sold and transported exempt from import taxes and duties.
SOME HIGHLIGHTS OF THE MARKET IN THE U.S.A :
▪ Classical antiquities and ancient art at auction declined by 9.7%, most of the sales were Chinese artifacts.
▪ The antique market continues to show a rapid decline in average price (down 27%), consignment (down 15%) and total value (down 40%).
▪ Old Masters, 19th Century and Impressionist auction sales declined 37%.
▪ Modern Art auction sales were down 56%
▪ Contemporary Art auction sales dropped 35%.
▪ Supply and demand for Prints, Precious Books and Maps continues to decrease.
EUROPE ART MARKET
Europe is the largest art market in the world.
In the art and antiques category, Europe is the second largest market in the world. In the antiques auction category, Europe experienced a rapid decline of sales from $899.1 million to $807.5 million. In the Classical Antiquities and Ancient Art category Europe experienced an increase of 190% in auction sales in 2016, mainly by including a large number of ancient Chinese art to the category.
Old master works, 19th Century and Impressionist art auction sales decreased 25% for the year.
Modern Art auction sales dropped 27% in 2016.
Post-war and Contemporary art auction sales declined from nearly $1.2 billion to a little over $800 million in 2016.
ASIAN ART MARKET
Asia has become the largest continent for auction sales of art and antiques. Sales were down by 1.6% in 2016. Within Asia, China (including Hong Kong and Taiwan) had the lion’s share of sales with 90% of the entire market.