Art

The Future of the Art Market 2023: Predictions

The Affluent Ceo.

Jul 24, 2023 — 3 min read

Pablo Picasso, Femme nue couchée. Source - Sotheby's

As we move further into 2023, the global art market continues to evolve, shaped by a myriad of factors ranging from economic conditions to technological advancements. Based on insights from the Art Basel and UBS Art Market Report 2023, we explore the potential trends, challenges, and opportunities that lie ahead.

Dealer Optimism and Regional Differences

At the close of 2022, the dealer community was cautiously optimistic

about the year ahead. According to the report, 45% of dealers expected an improvement in sales, while 39% anticipated stable results. Interestingly, the smallest dealers, those with an annual turnover of less than $250,000, were the most optimistic, with 52% expecting an increase in sales.

However, this optimism was not uniform across all regions. Dealers in China and South America were the most hopeful, with 68% and 67% respectively predicting an increase in sales. In contrast, dealers in African countries were less optimistic, with 60% predicting a potential decline in sales.

Auction Sector Outlook

The auction sector also expressed a mixed outlook for 2023. While just under half of the respondents expected an improvement in their sales, a significant 24% predicted a drop in their own auction sales. This suggests that while the auction sector may see growth in 2023, it could be a year of mixed outcomes.

Shifts in Buyer Behavior

The report noted a balance between new and established buyers in 2022. If this trend continues, we may see a further diversification of the buyer base in the art market. Dealers and auction houses may need to continue expanding their outreach and marketing strategies to attract new buyers while maintaining relationships with established clients.

Digital and Online Sales

The pandemic has accelerated the shift towards online sales in the art market. While the report noted a decline in the share of online sales in 2022 compared to the peak pandemic years, the overall trend towards digitalization is likely to continue. This could include further growth in online auctions, virtual exhibitions, and the use of digital tools for marketing and sales.

High Net Worth Collectors' Outlook

High Net Worth (HNW) collectors, a key segment of the art market, remained optimistic about the market's prospects. In fact, 77% expected the market to grow, and the majority intended to purchase art in 2023. This continued enthusiasm from HNW collectors could play a crucial role in driving the art market forward.

Economic and Geopolitical Concerns

Despite the optimism, the art market is not immune to broader economic and geopolitical concerns. The global economic outlook at the start of 2023 is slightly less gloomy than at the end of last year, but most forecasts still predict slower growth due to factors such as inflation, supply chain pressures, and the impact of Russia’s war in Ukraine. These slowdowns are likely to have a more pronounced effect on advanced economies, including the key US market.

Regulatory Concerns

In addition to economic and geopolitical issues, regulatory concerns are also on the horizon. HNW collectors identified increased regulations on transacting and international trade, as well as the rise of legal issues in the art trade (such as restitution cases, fakes, and forgeries), as their top concerns in 2022. These legal and regulatory issues will continue to shape how and where business is conducted in the art market.

Conclusion

As we navigate through 2023, the art market will continue to adapt and evolve in response to these trends and challenges. While there is a sense of optimism, it is also clear that the art market will need to navigate a complex landscape of economic, geopolitical, and regulatory factors. As always, the resilience and adaptability of the art world will be key to its success in the year ahead.