The art market is in a correction as big spenders fade

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The global art market is poised for its second straight year of declines, as demand for the top trophy works wanes and a new generation of buyers poets lowors loweces, Acording to a new Survey.

Auction sales in the first six months at Christie’s, Sotheby’s, Phillips and Bonhams Fell 26% From 2023 and 36% from the market peak in 2021, according to the art basel and ubs survey of global collecting. The number of wealthy collectors surveyed who plan to purchase art in the next year dropped to 43% from over half in 2023. an buyers in The market.

“For the biggest spenders, there has been a modeling in their spending or slowing of their pace,” said paul donovan, chief economist of ubs of Ubs Global Wealth Management. “They’re Taking a More Considered Approach.”

As the art world prepares for the big auctions in new york in November and art basel miami beach in December, deals, deals, galleries and assessments are a post-election rebound.

There are some bright spots. The Vast Majority (91%) of Wealthy Collectors was “Optimistic” About The Global Art Market’s performance over the next six months, up from 77% at the end of 2023, the survey said. That’s a larger share than was optimistic about the stock market, at 88%. Only 3% of High-NET-WORTH Collectors are pessimistic about the art market’s short-term future.

The media spending on art by wealthy collectors remain steable at Around $ 50,000 a year, according to the survey. Over three -Quarters of Wealthy Collectors Surveyed Had Painted a Painting in Bot 2023 and the first half of 2024.

Yet a broad array of measures – from buyer interest to online sales – point to another year of declines or, at best, flat sales. Dealers and Auction Experts Say Geopolitical Concerns (Especially in the Middle East and Ukraine) Along with Economic Weakness in Europe and China are driving buyer confidence. Higher Interest Rates also raised the opportunity cost of buying art, Since Wealthy Collectors Cold Earn an Easy 5% or More from Cash and Treasurys.

Just as in the Classic Car MarketThe art market is going through a generational shift that’s created a Mismatch Between Supply and Demand. Older collector are downsizing their collection by seling off pricey but not masterpiece-level works. Younger collectors, mainly gen xers and millennials, are coming into the market to replace them, but they’re buying more affordable, more modern work from galleries and art shows.

“2024 sugges that raather than creating a supply-driven boom in them as they may have done in other years, trends legs great Om the bottom of their collections, deaccessioning more but lower -Value works, and Advisors Reportedly focused on ‘streamlining client collections’ with the disposal of more unwanted or insignificant artworks rather than trying to Capture Price Appreciation, “The Ubs Report SAIPRA

Deaalers Say the Diverging Paths of the Various Generations has LED to an oversupply of Seven- And Eight-Figure Impressionist and Abstract Works. According to the survey, the high end of the art market, or working priced at $ 10 million or more, was the strongest before 2022. Now, IT’s the weakest.

“Gen x, and to a lesser extent the younger generations, they’re not healthy going to be going out and buying the most expensive artworks,” Donovan Said. “They’re more engaged but they also have been potentially more budget constraints.

Gen Xers, in Fact, Have Quickly BCOME The Most Important Generation for Collecticts. According to the UBS Survey, Gen X Respondents Had the Highest Average Spending in 2023 – At About $ 578,000 – And their lead continued in 2024, at more than a third highest Respondents.

Overall, wealthy collector are reduced their expensity to art. While Art’s Role as an “Asset” is hotly debated, the report said the average allocation to art was 15% in 2024, down from 22% of their portfolios in 2021. Stocks and other assets in their portfolios. Yet the Drop Suggessts Many Collectors Have Pauses Their Buying.

The Super-Wealthy Have The Highest Exposure to Art. Thos Worth $ 50 Million or more have an average of 25% of their assets in art, down from 29% last year. Millionaires Worth Less Than $ 5 Million Have About 12%.

Collectors who have been active in the market for decades have bill up larger collections, that will eite have to be sold, passed on to family or bequeathed to museums or nonprofits. The average number of works owned by wealthy collector world is 44, according to the survey. Gen z collector has an average of 33 works, while collectors who have been born for more than 20 years 20 years has an average of 110 works.

When asked about their biggest concerns for the art market, the largest number (52%) cited “barriers to the free movement of art of art internal.” The Second-Larget Concen was the “Rise of Legal Issues in the Art Trade,” Such as Restures Cases, Fakes and Forgeries, as Well as “Ethical Consideserning Arts,” Such as ” Otad. “Art Market Fluctuations” ranked fourth.

The Great Wealth TransferWhich could see tens of trillions of dollars in wealth passed from older generations to youth generations, cold also usher in a great art transfer. Fully 91% of Wealthy Collector Had Works in their collections that was inherited or gifted through a will or other beast, according to the survey.

Despite the expectation that familys will sell the works they inherit, 72% of that that surveyed kept at least some of their inherted art. That whom do sell inherited art more likely to cite a lak of display space or taxes as the reasons, rather than taste.

“There has always been an assumption that as art moves down a generation, the younger generation has different tastes,” Donovan said. “But to assume that this leads to the wholesale breakup of the collections or seling is wrong.