Few years have been as tumultuous in the art market as 2023. Of course, 2008 and 2016 were bad (and not to mention 1990), but the ongoing art market “correction” was preceded by the post-Covid low-interest rate economy that drove a speculation bonanza for young and emerging artists. That bubble has popped. Today’s market is happening amid what Art Basel CEO Noah Horowitz called, in the recently released Art Basel and UBS Survey of Global Collecting, “an ongoing backdrop of high interest rates, persistent geopolitical tensions and trade fragmentation that weigh on the sentiments of buyers and sellers alike.”
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What better time, then, to take a look at what buyers are thinking. There’d be no art market without them, and if there’s change on the horizon, it’s the collector class that will make it happen.
Here’s three takeaways from the survey, which digs into the buying habits of over 3,600 high-net-worth individuals (HNWIs) in 14 major markets during 2023 and the first half of 2024.
Air is Thin at the Top
As a whole, sales in the art market fell to $65 billion, down four percent from 2022. That decline is largely due to less activity in the high end of the market. It’s those multi-million dollar sales that, according to the report, were “so pivotal in driving sales out of contraction in 2020.” The result is stunted growth in the market despite sales of work in lower-points actually going up in volume.
“Often the high-end [of the market] is always the one that pulls out the best during a crisis, it’s what drives things forward,” Dr. Clare McAndrews, an arts economist and the author of the report, told ARTnews. “And in the last 18 month period we’ve really seen that reversed, with the lower end that’s been more successful. It’s not that the highest segment of the market is doing poorly. It’s just not as many really high-value things being sold.”
This shift has led to an expanding base and a narrowing summit, which McAndrews suggested could in time make the market more stable but less sexy.
It’s also significant that, across all segments, people are taking their time when buying art, and, according to several sources, preferring private sales to public auctions where they can haggle more aggressively. This can color the sentiment of people who for decades have been used to monster evening sales and VIP art fair days that, a few years ago, more resembled an episode of Supermarket Sweep than a stroll through the MoMA.
“The days of huge presales and fizzy VIP days are over perhaps,” Horowitz said at the launch event for the report in Tribeca Wednesday, during which he, McAndrew, and UBS Global Wealth Management’s chief economist Paul Donovan took the stage in front of a studious, stern-faced crowd, scribbling notes in notebooks at marble tables at the chic restaurant inside Spring Studios. “It takes time to do business these days, and business is happing at every point during the five-day span of an art fair. It’s not an easy market. Client engagement is more difficult and the cost of business for galleries is going up.”
The Great Wealth Transfer and a (Possibly) Flush Market
By most accounts, we are in the early stages of the greatest transfer of wealth in history. Slowly but inevitably as much as $84 trillion will pass from the bank accounts, holdings, and collections of the elderly Silent Generation and greying Baby Boomers to their younger Generation X, Millennial, and Generation Z relatives in the next 20 years or so. Among the billionaire set alone $6 trillion is expected to pass on to spouses, children, and charitable organizations or museums. So, what does that mean for the market? The tastes of the younger generation are hardly that of their older relatives.
Still, survey data says that younger high net-worth individuals are actually quite interested in preserving inherited artworks: 91 percent of survey respondents already have pieces passed down to them, and 72 percent of those individuals say they’ve kept some of these works in their collections. Only a minority, less than a third, cited a lack of compatibility with their existing collection as a reason for selling or donating these inherited items.
So, what then are the motivations a young rich person might have for unloading works passed down to them? It turns out that the reasons for selling or parting with inherited art are mostly practical. 55 percent of respondents said they put work up for sale because they had limited storage space, while 47 percent said they did so to cover inheritance taxes. At the same launch event, Donovan, the UBS economist, said the fact that people are selling art to cover state or inheritance taxes was one of the most interesting parts of the report.
“We’ve got $84 trillion changing hands over the next 20 years and governments are short of money. What do you think is going to happen? Wealth taxes, inheritance taxes, they are likely to go up, so that aspect of churn, when you’ve been forced to sell at least part of an art collection, may become more significant just because of the way fiscal policy is undoubtedly going to be going over the next few years,” Donovan said.
Where’s the Party?
It’s no surprise that post-pandemic, HNWIs have shown an appetite for attending art-related events, while also adapting to, and normalizing, the Covid era’s learned behavior of buying art from online viewing rooms, websites, and even Instagram.
In 2019, HNWIs averaged 41 art-related events per year, including six gallery exhibitions and five art fairs. That attendance obviously plummeted in 2020. But, according to the report, data shows a welcomed recovery to in-person events, with HNWIs attending an average of 49 events in 2023 and planning for around 46 in 2024.
While there was growth in attendance for fairs and gallery exhibitions, other event types such as studio visits, live auctions, biennales, and large arts festivals saw a drop in attendance compared to 2019. Travel patterns also shifted as HNWIs balanced event attendance between local and international locations, with 54 percent of events attended locally in 2024.
“We’re seeing audiences becoming increasingly specific and intentional about where they show up,” Horowitz told ARTnews over Zoom. Art Basel has become slightly regionalized since the pandemic, he said, with clients tending to focus on the fairs in their part of the world, with Miami becoming more of a Latin American affair and Basel in Switzerland decidedly European. Art Basel Paris, Horowitz said, was the most international of the platform’s fairs.
Among the most interesting metrics in the report is the disconnect between the wider survey and a more targeted one given to Art Basel VIPs. While sifting through the data, McAndrew found it surprising that that report highlighted significant differences in how different groups of collectors approach art events and purchases. Basel’s survey of highly engaged, often private collectors—who weren’t selected based on wealth—revealed distinct behaviors compared to the broader high-net-worth public surveyed in the main report.
The wider group of HNWIs is attending more art-related events than before the pandemic, showing a renewed interest in experiencing art in person. However, while these collectors enjoy attending events, many prefer to make purchases online, by email, or through other remote channels rather than buying directly during their visits to galleries. Only about 20 percent of those buying through galleries preferred in-person transactions.
In contrast, the smaller subset of highly engaged VIP collectors from Basel tends to prioritize in-person interactions. They attend fewer events than they did pre-pandemic, but these events remain a key venue for buying. This creates a dynamic where the wider art-buying public is more active in attending events but more inclined to buy online, while the smaller group of dedicated private collectors is attending fewer events but places greater importance on in-person buying experiences.