Art market experts see rebound in confidence after 2023 slump

LAST year’s art market was one to forget. The gallery dinners and VIP days and benefit galas continued as they always had; evening sales still sold, art fairs still opened, dealers still inaugurated shows with smiles and news of “significant museum interest” in whatever they were trying to sell.

But according to a report from UBS and Art Basel, global sales of art and antiques were down about 4 per cent year over year at US$65 billion, well below the 2014 high of US$68.2 billion.

You could feel it in the field, where auctions were good, not great; art fair sales were fine, not frenzied; and dealers did their best to put on brave faces as they explained that, well, actually, some pieces were still available. Christie’s reported a 25 per cent decline in sales by value; Sotheby’s said its numbers stayed about even, though it included such non-art things as real estate and car auctions in its total.

Last year “was a rough year”, said Alex Logsdail, chief executive officer of Lisson Gallery, who added that no one could actually call it a legitimate recession. “It’s just a slump.”

But as the art market revs up with the New York mega auctions in May before the Art Basel in Switzerland in June, many participants are cautiously speculating that the worst is behind them.

“Since December of 2022 to just about now, there’s been this kind of clutching at your sides, wondering when it’s all going to be over,” said Marion Maneker, who writes the popular Artelligence industry newsletter. “You get the sense the market has gone as far down as it’s going to go, but the thing we’re waiting for is stuff for people to get excited about.”

In conversations throughout 2023, one of the dominant complaints amid the crowds milling about art fairs and auctions was the absence of fresh trends.

This is a world that creates its own momentum, and despite (or perhaps because of) the cacophony of dealers championing their own artists, nothing seemed to stick. There were no hot young painters dubbed the new vogue, no massive historical rediscoveries pushing the secondary market up, no broad indication that collectors had to strike while the iron was hot.

“It’s the vibe economy, which I mean slightly jokingly but also sincerely,” Logsdail said. “People care that there are others participating and supporting the same artists they support.”

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It is no coincidence that this lull in enthusiasm coincides with markedly tighter financial conditions. Money is not sloshing around the global economy like it used to, and given that art is perhaps the most discretionary of all the discretionary expenditures in collectors’ lives, higher borrowing costs have inevitably contributed to a pullback.

For things to change this year, participants said, the economic calculus will almost certainly need to shift back to something more freewheeling.

“It’s going to take one good, or decent, auction season,” Logsdail said. “And that is going to be somewhat predicated on the quality of the material, but primarily on interest rates coming down.”

Indeed, the real sign the market is on an upswing, Maneker said, will be when collectors’ finances are solid enough that they stop caring about whether they have timed the market correctly: “We’ll know when people are buying because they’re excited, not just because they think they got good value.”

Logsdail is cautiously optimistic that 2024 is looking up. “I think it’s too early to trust that things have turned a corner,” he said. “But I will say that the beginning of this year has been extremely encouraging and far more active and robust than the year prior.”

He sees the most activity in “the primary market for artists of quality, where the prices have not been overly elevated – the market is still very much there and alive”.

If past performance is any indication of future results, one thing that will not move the art market’s needle is the November election.

“It was super strong under (Barack) Obama, it was strong under (Donald) Trump, it’s been strong under (Joe) Biden,” said art adviser Candace Worth. “All the times people expected the market to shift, I feel like that never happened.” BLOOMBERG