Highlights and Tuts About the Art Basel & UBS Art Market Report 2024 by Arts Economics

Art enthusiasts and market observers, take note! Art Basel and UBS have finally unveiled the highly anticipated Art Market Report 2024. Authored by the esteemed Clare McAndrew, founder of Arts Economics, this annual analysis provides an in-depth review of the international art market. 

From the bustling world of galleries and auction houses to the dynamic energy of art fairs, it sheds light on the performance of various market segments. Nonetheless, this report can take hours to digest, so our team decided to highlight the parts we found the most interesting and influential. Let's strap in and delve into the year's most significant trends and developments.

The Global Market

The global art market experienced a slowdown in 2023, with total sales dropping by 4% compared to 2022. However, it's important to note that this still positions the market above pre-pandemic levels. Interestingly, despite the decline in total value, the number of transactions actually increased by 4%. This suggests a shift in buying behavior, with a trend towards acquiring lower-priced artworks.

Shift towards Lower-Priced Artworks

This trend is particularly evident in online sales, which grew by 7% in 2023. While online sales reached a peak of $13.3 billion in 2021, they remain nearly double the pre-pandemic level. Notably, over 85% of online art sales in 2023 were for works priced under $250,000, highlighting the dominance of lower-priced segments in this space.

Regional Divergence

Looking at regional trends, China's art market emerged as a strong performer in 2023, with a surge of 9% following the lifting of strict COVID-related lockdowns. This increase can likely be attributed to pent-up demand and enthusiastic post-lockdown buyers. In contrast, established art hubs like the US, UK, and France all experienced declines in sales. The US market, though still leading globally, saw a 10% drop, likely due to a decrease in high-value transactions. Similarly, the UK and French markets faced declines of 8% and 7% respectively, potentially impacted by economic pressures and a reduction in high-end art imports.

Art & NFTs

In 2023, a large number of art sales continued to take place through non-traditional channels. Artists, creators, and resellers used both online and offline platforms. While more people interacted with art dealers through their websites, fewer collectors, especially younger ones, used external online platforms to buy art. The use of platforms like NFTs and Instagram declined from 17% in 2022 to just 8% in 2023.

Rise, Fall, and a New Life of NFTs

Despite a significant decline in the value of NFTs from late 2021, sales of art-related NFTs in 2022 still reached a substantial $2.4 billion, which is significantly higher than the levels observed in 2020. However, the art segment within the NFT market experienced a further 51% drop in 2023, reaching $1.2 billion. It's important to note that despite this decline, there were still instances of high-value sales for specific projects, indicating the potential for significant transactions within the NFT space.

In 2022, art sales surpassed those of collectibles. However, in 2023, the collectibles segment within the art market experienced a significant downturn, dropping by 64% to $6.3 billion. This decline is thought to be due to reduced speculative buying that previously dominated the collectibles market, indicating a potential shift towards more sustainable market practices.

Overall

The NFT art market is alive and well. It experienced a significant decline in overall value but still holds potential for high-value transactions for specific projects. The collectibles market within the art market saw a sharp drop, potentially indicating a move away from purely speculative buying practices.

What to Expect From the Art Trade in 2024

The art market faced significant challenges in 2023, with stalled growth and decreased sales. However, there is now a sense of cautious optimism as we look towards 2024. This optimism is tempered by a shift in market priorities.

For instance, the focus among art dealers is shifting, with 36% anticipating sales growth in 2024, a decrease from the 45% in 2022. Interestingly, larger dealerships are more optimistic, with 54% expecting an increase in sales, possibly due to their ability to handle market fluctuations. Optimism is highest in South America and the US, while Asia and Japan show a more cautious approach, with some dealers predicting a decline. Despite the overall tempered outlook, stability is the dominant sentiment, with 48% of dealers expecting sales to hold steady in 2024, a significant increase compared to previous years.

Prioritizing Stability and Profitability

The art market's priorities are changing due to increased operational costs. Many businesses are shifting their focus from just increasing sales to prioritizing profitability. They are reevaluating traditional growth models and exploring innovative strategies to ensure long-term sustainability.

The Future of Sales Channels

The significance of online sales is increasing, with nearly half of dealers expecting a rise in online sales in 2024. This underscores the importance of establishing a strong online presence to connect with new generations of collectors who are increasingly comfortable purchasing art digitally. Art fairs continue to be an important sales channel, with a similar number of dealers expecting consistent sales at these events. However, the growing costs associated with participating in art fairs are leading businesses to reassess their effectiveness. Companies are evaluating which fairs provide the best outcomes and best align with their current requirements.

In Summary 

In our article, we only scratched the surface of the Art Market Report 2024. We encourage you to access the full report to explore a wealth of data and analysis, which will help you grasp the current state-of-the-art market and predict its future direction. Whether you're an experienced collector, an emerging artist, or just someone intrigued by the art world, this report will be an invaluable resource.