The global art market is experiencing a complex landscape in 2023, as new findings indicate a significant 32% decline in spending among high-net-worth individuals (HNWIs). This downturn stands in stark contrast to a rise in overall market volume. According to the latest report from Art Basel and UBS, authored by art market expert Dr. Clare McAndrew, a survey of over 3,600 HNWIs across 14 major markets reveals that the average expenditure on art has dropped to approximately $363,905. This reduction primarily stems from decreased purchases in the upper echelons of the market, casting a shadow over the recent upward trajectory seen in previous years.
Dr. McAndrew’s research attributes this spending decline to a combination of external factors, including elevated interest rates, ongoing geopolitical unrest, and trade fragmentation—conditions not present during the exuberant, speculation-fueled market that characterized the COVID years. The current environment raises concerns about the sustainability of the contemporary art market, particularly among high-end collectors. “The market, especially for contemporary works, has taken a downturn that it may never recover from,” suggests the report.
Conversely, the median spending figure has remained relatively steady, only dipping slightly from $50,165 in 2022 to $50,000 in 2023.
Furthermore, the first half of 2024 recorded a median spending of $25,555, indicating that the market’s stability persists as it transitions into the upcoming year.
One of the report’s standout revelations pertains to generational spending patterns. Millennial collectors witnessed an alarming 50% drop in expenditures compared to the previous year, following a period of notable growth in 2022. The diminished spending among Millennial HNWIs could significantly explain the broader market’s perceived decline, despite the median figures remaining stable. In contrast, Gen X collectors displayed a modest yet steady increase of 3% in spending, achieving the highest average expenditure of $578,000 in 2023, compared to Millennial collectors’ $395,000.
Dr. McAndrew highlights that this shift in spending behavior does not necessarily equate to reduced interest in art among the wealthiest individuals. “I’ve been asked, because billionaire wealth is rising, whether the high-end dip we are experiencing is just from billionaires not buying as many high-value works. There is less spending at the top end, yes, but the fact is those very wealthy people are actually buying lower-value works,” she noted, emphasizing a growing preference for artworks priced under $700,000 and even below $10,000, including prints and works on paper.
She added, “That does create a slightly lower value market, but that is not necessarily a negative thing.” This ongoing transformation within the art market indicates a potential shift towards inclusivity and diversity in art ownership, even as the landscape continues to evolve.
