The art market remains resilient, despite a slowdown in sales. In 2023, the market value eased, decreasing by 4% to an estimated USD 65 billion.

The eighth edition of The Art Basel and UBS Global Art Market Report 2024 provides a comprehensive, macro-economic analysis of the state of the global art market in 2023. The report analyzes the impact of economics and geopolitics on art sales, reviewing some of the main trends in the market over the last year. Written by cultural economist Dr. Clare McAndrew, founder of Arts Economics, and co- published by Art Basel and UBS.

Global Sales: In 2023, global art market sales adjusted to an estimated USD 65 billion, showcasing resilience despite a slowdown of 4% year-on-year and surpassing pre-pandemic 2019 levels of USD 64.4 billion. Although factors such as high interest rates, inflation, and political instability contributed to slowing growth at the top end of the market, there was a notable 4% increase in transaction volume, totaling USD 39.4 million. This growth in buyer activity was particularly pronounced at lower price levels, creating a more buoyant trade environment for dealers and auction houses in these segments of the market.

Clare McAndrew, Founder, Arts Economics, said:

“2023 saw a much-anticipated easing in sales in the art market after two years of strong growth after the pandemic. While high-end sales were thinner, activity held up at lower levels and the market continued its evolution along a dual path of offline and online sales. As in many other industries, rising costs were the key challenge for businesses in the art market in 2023, and profitability became a more closely monitored metric than sales. The focus for many in 2024 has shifted from rapid expansion at all costs to finding ways to achieve sustainable and profitable growth and stability as they continue to navigate an uncertain economic and political future.”

Leading Markets: The US preserved its leading position in the global art market, accounting for 42% of sales by value, down 3% year-on-year. China surpassed the UK as the second-largest global art market with its share rising to 19%, while the UK fell back to third place with a 17% share. France retained its position as the fourth-largest art market at 7% of global sales.

Following robust growth in the wake of the pandemic, reaching a historical peak of USD 30.2 billion in 2022, the US art market experienced a slowdown in 2023, declining by 10% to USD 27.2 billion. The US remained the center for worldwide sales of the highest-priced artworks, with the contraction reflecting a decrease in sales at the top end of the market. Following a year of some record-breaking sales at the high-end in 2022, the decline in 2023 left the market slightly below its pre-pandemic level in 2019.

Sales in the Chinese art market increased by 9% to an estimated USD 12.2 billion amid the easing of COVID-19-related restrictions and a strong surge of activity in the first half of the year. Enthusiastic buyers capitalized on sales of postponed auction inventories in Mainland China, while Hong Kong’s major fairs and exhibitions returned to their full-scale programs. In the latter half of 2023, the pace moderated, with slower sales. This changing trend was likely influenced by projections of slower economic growth and a persistent real estate slump in Mainland China.

After showing resilience to economic and political pressure in previous years, sales in the UK decreased by 8% to USD 10.9 billion in 2023. The UK remains a key hub for sales of the most expensive artworks worldwide. A decline in these high-end sales, along with imports into the UK, contributed to the fall in the market in 2023, leaving values 11% below their pre-pandemic 2019 level.

Noah Horowitz, CEO, Art Basel, said:

“Although down year-on-year, core collecting audiences remained actively engaged with the art market in 2023 and helped support prices on balance – albeit through a more value-driven and quality-conscious lens. The ramp-up in participation from new and often younger global buyers, in tandem with gains in the online sector, underscores some critical green shoots in the market with substantial future potential. Overall, the reversal of trend at the high end of the market after years of compounded acceleration was one of the defining features of the art business last year, as it also creates an opening in the market for exciting new trends and narratives to emerge.”

Dealer Figures: In 2023, after two years of consecutive growth, dealer sales slowed, with aggregate values easing by 3% to just under USD 36.1 billion. Trends reversed as smaller dealers with an annual turnover of less than USD 500.000 experienced a significant 11% increase in average sales, while larger dealers, with turnovers exceeding USD 10 million, encountered a 7% decline as some buyers were more cautious and sales were thinner at the high end.

Auction Figures: Following a record-breaking year in 2022, public auction sales declined by 7% to USD 25.1 billion. Notably, the USD 10 million-plus segment of the fine art auction market saw a substantial decrease in value, while certain proportions of middle and lower-priced segments continued to grow. Private sales by auction houses defied the trend and grew by 2% to USD 3.9 billion, bringing the estimated total of public and private sales at auction to USD 28.9 billion in 2023 – a decline of 5% year-on-year. The US, China, and the UK remained the largest auction markets, with a combined market share of 74% of public auction sales by value and down 3% year-on-year. Post-war and Contemporary art remained the largest sector of the fine art auction market in 2023 despite declines in growth since its peak in 2021, representing a significant 53% of global sales by value. Sales of Modern art witnessed a further slowdown in 2023, as well as Impressionist and Post-Impressionist art following their strongest performance at auction in 2022. China’s strong rebound in 2023 contributed to the positive 15% boost in overall sales of Old Master paintings year-on-year to USD 1.1 billion, just below their pre-pandemic level in 2019.

Art Fairs: In 2023, sales at art fairs accounted for 29% of dealers total revenues, marking a 6% decline from the robust return observed in 2022 and surpassing the levels seen in 2021 (27%). Dealers with turnovers exceeding USD 10 million expressed the most optimism for 2024, with 50% expecting an increase in art fair sales, despite their share of sales at art fairs decreasing from 40% of annual sales in 2022 to 30% in 2023. There was also a positive outlook overall among dealers, with 39% predicting an increase in art fair sales in 2024, 46% expecting a stable year ahead, and only 14% anticipating a decline.

Online Sales: Global online sales grew in 2023 increasing 7% year-on-year and reaching an estimated USD 11.8 billion. Although down from a peak in 2021 of USD 13.3 billion, sales remained almost double the level of 2019 or any year before that and accounted for 18% of the market’s total turnover. Online sales in the dealer sector, including those made directly and through third parties, accounted for 23% of all dealer sales in 2023, up by 7% in share year-on-year, and on par with 2021. The biggest growth was driven by dealers’ own online channels and websites, which accounted for 20% in 2023, up from 12% in 2022.

NFTs: Following their peak of USD 2.9 billion in 2021, the downward trend in sales of art-related NFTs outside the art market continued in 2023. Sales of art- related NFTs on NFT platforms fell to USD 1.2 billion in 2023, down 51% year- on-year but still over 60 times the size of the market in 2020. Across the two segments of art-related NFTs and NFT collectibles, the value of art-related NFTs fell from its majority share of 67% in 2020 to 16% in 2023, compared with 84% for NFT collectibles.

Paul Donovan, Chief Economist at UBS Global Wealth Management, said:

“The art market continues to prove its resilience. Alongside the strength of financial markets, expected declines in interest rates, and weakening inflation, this offers hope for 2024. We are observing a shift in the luxury market away from goods purchases towards spending more on “having fun”- leisure travel, entertainment, and socializing. Art is so much more than possessing physical objects – and the events, experiences, and social networks associated with collecting should provide support for the sector.”

Outlook: Looking ahead to 2024, 36% of dealers expected an uptick in sales, while 48% expected turnover to remain stable, and 16% predicted a decline. Compared to the end of 2022 when the smallest dealers expressed the most optimism, in 2023 the largest dealers were most hopeful, with 54% expecting an increase. The effects of political and economic uncertainty were ranked as the biggest challenge by most dealers, followed by a focus on maintaining relationships with existing clients – a priority echoed since 2020. The cost of travelling to and participating in art fairs ranked as the third-largest challenge. While maintenance of current relationships was a primary concern for dealers in 2023 and 2024, they also noted the longer-term importance of expanding their geographical presence to reach new collectors. In the auction sector, optimism was relatively high for 2024, with 38% of the mid-tier auction houses surveyed expecting an improvement in sales, while only a small fraction (4%) predicted a drop in their own sales – a significant decrease from 24% in 2022.

Adrian Zuercher, Head Global Asset Allocation, UBS Global Wealth Management CIO, said:

“In the wake of easing COVID-19 restrictions, China’s art market has increased by 9%. This follows a similar pattern to the response we saw in other markets around the world in 2022, which reported an initial post pandemic boom followed by reports of slower sales and the pace of increase moderating. Like other regions, the luxury industry in Asia has also encountered a shift in spending on entertainment and experiences. This applies to the Asian art market too, where many art world fairs and events have resumed their full scale and visitors have returned with enthusiasm. From a wider economic perspective, growth in Asia is forecasted for 2024, driven by a shift in policy easing and a moderate expansion in regional exports.”
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