Dr Clare McAndrew: Top-heavy Art Market Is a Concern

News As Global Art Market Recovers, China Falls Behind Sam Gaskin

The global art market grew a modest 3% to US $67.8 billion in 2022, according to the Art Basel and UBS report, The Art Market 2023. The report’s author, Dr Clare McAndrew, offered her thoughts on two of its most significant findings: the acceleration of the art market’s high end, and China’s fall from the second to the third biggest art market in the world.

This year’s report tells us that the biggest art market (USA) took an even bigger share, the biggest dealers grew the fastest, and only the most expensive section of the auction market increased in value. How long has this ‘rich get richer’ trend been happening, and how intractable is it?

The high end outperforming the lower and middle tiers is not new, and has paralleled what’s been happening in the wider context of wealth, with a bigger share of wealth held by the top 1% of the population. But we really saw it pull away in 2022.

In the dealer sector, the largest dealers had a much better year than their smallest peers, and it was the same in the auction sector. The auction data allows us to track transaction-level data so you could really see this phenomenon last year with the $10 million-plus segment being one of the only ones to show an increase in value year-on-year, and all other price segments under that level contracted.

And you can see this over the longer term also—in the period from 2009 to 2022, the index for the Ultra-High End (U.S. $10 million-plus segment) grew almost 700%, whereas the low end (sub $50,000) showed a much more moderate increase over the period of 10% growth over 14 years. If these figures were adjusted for inflation instead of in nominal terms, that $10 million plus segment has still grown to five times its size, while sales in the segments below $50,000 have declined in value.

Why are the most expensive artworks and most sought-after artists so dominant?

This is really both a supply and demand issue—the scarcity of the highest-value works causing this narrow, really high priced top end, plus wealth continuing to increase at the top, and ultra high net worth collectors, who are slowly increasing in number, tending to often focus on these same, small number of artists and works.

Does a top-heavy art market pose long-term risks to the health and sustainability of the industry?

The top-heavy nature of the market is a concern because smaller galleries and businesses are not only the important incubators of artists and collectors for the high end, but also where the bulk of businesses and transactions take place.

China lost its spot as the second biggest art market in the world in 2022, with the U.K. pulling ahead. Is the China boom over?

China lost share last year but this was quite specific to the context: zero-COVID policies, lockdowns, stalled events, and exhibitions. To the extent that this has in fact created more pent up demand (for both shared experiences and sales), this could create a very buoyant market in the coming year, as it did in 2021 globally.

Participating galleries and our own reporting suggested Chinese collectors made a strong return at this year’s Art Basel Hong Kong. How far did the fair go towards restoring the Chinese art market?

Art Basel Hong Kong is such an important landmark event in the region and its visitor numbers alone indicate that people were really missing these opportunities to engage with events again. —[O]

Main image: Dr Clare McAndrew. Courtesy Art Basel.