Analyzing the Ups and Downs of the Modern Art Auction Market: Detailed Insights 2022

Analyzing the Ups and Downs of the Modern Art Auction Market: Detailed Insights 2022
ZHANG DAQIAN (1899-1983), Lotus. Source - Christie's

Modern art once held a dominating presence in the global fine art auction market, a fact hard to discern looking at today's figures. Accounting for a steady 22% of sales by value and 24% of transactions in 2022, the Modern art market now falls behind the thriving Contemporary sector, according to the Art Basel and UBS Art Market Report 2023. This shift reflects how the finite supply and scarcity of high-value Modern art have struggled to keep pace with the dynamic growth of the Contemporary art market, which continues to set record prices.

Despite the declining trend, the Modern art sector witnessed an encouraging recovery from its pandemic-induced low of $2.5 billion in 2020, posting sales of

$3.4 billion in 2021. However, this momentum was short-lived as 2022 sales dropped by 8%, reverting to the pre-pandemic 2019 level of $3.1 billion.

The past decade has been challenging for the Modern art market. Since its historical peak of $5.4 billion in 2011—propelled by robust sales in China and a post-financial crisis recovery—the sector has witnessed inconsistent performance, particularly in the two largest markets, the US and China.

Sales in the Post-War and Contemporary Sector Key Markets 2009–2022, Source

US and China: A Study in Contrasts

The US Modern art market endured two consecutive years of double-digit declines in 2019 and 2020, plunging to its lowest point since 2009. Yet, this contraction set the stage for a remarkable recovery. By 2022, sales rebounded by 18% to $1.3 billion, the highest level since 2018, with high-value lots contributing significantly to this resurgence.

Meanwhile, China's Modern art market, which had withstood the pressures better than the US until 2020, took a hit in 2022 with a substantial 36% fall, reaching its lowest point since 2009. Notwithstanding a few high-priced individual sales, China's global market share fell to 27%, placing it second to the US.

UK and European Markets: A Slow but Steady Recovery

The UK, on the other hand, embarked on a steady path to recovery. Following two years of declining sales, the UK market rebounded, recording a 10% year-on-year increase in 2022 to just over $500 million. Meanwhile, France, despite a remarkable recovery in 2021, saw only a 1% growth in 2022.

Germany presented a different picture with a significant 33% increase in Modern art sales. However, declines in Italy and Spain contributed to the modest 5% growth of the European Union (EU) as a whole.

Picasso and the Reign of Top Artists

Picasso, for the fifth consecutive year, emerged as the highest-selling artist in the Modern art sector, accounting for six of the top 20 lots. Together with Magritte, Zhang Daqian, Alberto Giacometti, and Li Keran, these top five artists constituted 43% of the market by value, reflecting the significant influence of high-selling artists in the market.

This dominance of high-value artists and works is evident when considering the price segments. A substantial 63% of sales came from works sold over $1 million, underscoring the significant weight of high-priced segments in the overall market performance.

Major Auction Houses

Christie’s and Sotheby’s, two leading auction houses, accounted for a combined 70% of sales by value in the Modern art market. Along with China Guardian, Beijing Dongxing Hanhai, and Bonhams, the top five houses made up 78% of total sales value.

In conclusion, while Modern art continues to carve out a substantial portion of the global fine art auction market, its dominance has waned. How the sector adapts to the changing dynamics of art auctions, particularly in the context of the growing Contemporary art market, will be a critical determinant of its future trajectory.

Sources

Art Basel & UBS (2023), THE ART MARKET 2023 A report by Art Basel & UBS. https://theartmarket.artbasel.com/download/The-Art-Basel-and-UBS-Art-Market-Report-2023.pdf

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