Why is the art market in great shape despite the economic crisis?
Admittedly, the essence of art is to shake up codes, play with paradoxes, and show strong counterpoints. But even so, it is enough to raise an eyebrow to see that the art market is doing so well amid the economic crisis and fears of a global recession. 2022 is a series of crazy numbers: the second biggest sale of a work (portrait of Marilyn Monroe by Andy Warhol), a double record for the most expensive collection ever sold, a record for more than 100 million works… How such a gap with the global economy as a whole to explain?
The trend is actually nothing new. Art auctions have grown every year since 2010, says Audrey Doyen, an anthropologist and art market and sales expert. Only two exceptions: 2018, a “weak year” and 2020 with the coronavirus. “Even there, sales were down in the first half, but there was a slight decline in other months.” Annual report Art Market 2022Art Basel & UBS reported revenue of $65.1 billion, surpassing pre-pandemic levels released in May. And just this Monday, Christie’s and Sotheby’s announced a record year (all sales combined). In short, the market is in excellent condition, “there is still a speculative bubble that has not burst, so the numbers are still growing,” concludes the expert.
Divorce and death drive the market
So what is special about 2022? Turnover has been particularly strong with some record sales, three of the ten biggest auctions of all time, taking place in the last twelve months.. “The death of Microsoft co-founder Paul Allen*, which led to the sale of his private collection, is becoming more common. Ditto for the divorce of the Macklowe couple **”, supports art history doctor Lea Saint-Raymond. Works by Paul Allen sold for $1.62 billion in November 2022, breaking the previous record for the most expensive collection at auction held by Macklowe’s last spring for $922 million.
Hence, increased supply and more significant demand. Léa Saint-Raymond develops: “There are more and more rich people in the world, and the rich are willing to spend a lot for works of art.” Recession? I dont know. “Art is more protected during economic crises. Instead, it’s seen as a safe haven,” continues Audrey Doyen. “Clients want to diversify their assets to take advantage of art and know that most works continue to increase in value over time,” Adrien Meyer, co-president of the Impressionists and Fine Arts department, told AFP in November. Christie’s. “There are more billionaires than masterpieces” on the market, he concluded.
But all is not rosy. As we said, the year is increasing with big sales. According to AFP, 52 cases have exceeded $30 million, the previous record being 36 in 2015; 24 jobs surpassed 50 million in 2014, breaking the record of 15 jobs. The threshold of 100 million has been exceeded 6 times, while it has never been more than three times in the same year. Audrey Doyen insists: “The market is mainly based on big operators and big houses, mainly contemporary art and fine art”.
Result: less honorable for the situation “tiny” houses and other less popular trends, the expert identifies. Impressionist, modern and contemporary art accounts for 89% of the more than 30 million auctions throughout history. According to AFP, in 2022, this hegemony increased further and reached 94%. The choke point is also geographic: about 73% of the more than 30 million auctions Place in New York, mainly at Christie’s and Sotheby’s. Count on 80% in 2022.
A golden age before the fall?
In some ways, the situation resembles a cinema that relies more on a few record blockbusters to mask economic health that is more nuanced than it appears.
Will art still be sold in the future? Léa Saint-Raymond adds: “The market is benefiting from a return to face-to-face with numerous art exhibitions that attract fortunes from all over the world.” Seeing the works, going there, attending large events, all encourage shopping over absolute distance through collective imitation. More precisely, this model may end due to the cataclysmic ecological balance of such personal travel around the world, the expert notes. The golden age is definitely here, but a recession may be on the horizon.