Words Thomas Patrick
October 25, 2024

As 2024 reaches its final quarter, the art world is taking stock of the past 12 months and examining the current state of the global art market. One of the most pronounced points of note is the difference between the Western art market and the Asian art market, in particular, the US and Chinese art markets. The US art market remains the largest, accounting for 42% of global sales, with China in second place, accounting for 19%, after overtaking the United Kingdom in 2023. Yet despite the dominance of the US art market, the Chinese art market is demonstrating much more resilience to overall decline across the globe after a post-pandemic peak.

One of the biggest shocks for the Western art world was that in 2023, the auction sales at Christie’s, Sotheby’s, and Phillips were down 18% from 2022 sales. Philip Hoffman, CEO of the Fine Art Group, told CNBC that “sellers want 20% more, and buyers want 20% less,” which has created a stalemate that continues into 2024. Artsy.net, in their Art Industry Trends 2024 report, surveyed gallery professionals from 68 countries and found that nearly 50% of galleries had implemented cost-cutting measures to increase profitability in 2023. This is due to the increased cost of running a gallery, with 42% of those surveyed noting that operating costs had increased slightly in 2023, and 32% reporting that costs had risen significantly. A large part of this decrease in sales in the US is due to buyer uncertainty in light of the slowing economy, higher interest rates, and potential political upheaval, which is causing collectors to be more careful. This has affected upcoming artists more than established names, as the markets for their work have rapidly declined. Some young artists in the US have seen their works decrease in value by as much as 94%.

There is some good news. Private markets and galleries are not as affected by outside events, such as economic downturns and market volatility, due to not being as reliant on investment returns. Even though online art buying has become increasingly popular, accounting for 18% of the art sector’s profits according to Forbes, in-person buying still remains the most popular for the highest-priced art. A report by Arts Economics found that 95% of online sales were for art valued under $50,000. Auction houses are also looking to expand their operations, with Christie’s acquiring classic car seller Gooding & Company to ensure the auction house is able to move through the current art market downturn.

In Asia, the art market is on the increase, fueled by China’s growing art scene. A big part of this increase has been Western investment in the Chinese art scene. The West Bund Museum, designed by David Chipperfield, holds the Centre Pompidou’s first Chinese outpost, known as the Centre Pompidou x West Bund Museum Project. Luxury brands such as Chanel, Prada, Hermès, Loewe, and Louis Vuitton have also collaborated with museums, artists, and art fairs in China. This year, Chanel and the Power Station of Art in Shanghai signed an agreement to restore the museum and enrich its collection and research capacity. As part of the partnership, Chanel will fund an upgrade of the third floor, which will be named the Espace Gabrielle Chanel. The floor, over 10,000 square feet, will include the first public Contemporary Art Library in mainland China. On top of this, Art Basel in Hong Kong returned to its pre-pandemic scale for the first time since 2019, welcoming 242 galleries from the Asia-Pacific, Europe, the Americas, Africa, and the Middle East. The 2024 edition saw significant sales and, going forward, will now be considered one of the most important art festivals on the calendar.

This heavy investment is having a positive effect as there has also been a surge in younger people investing in art in China. According to Nicolas Chow, Sotheby’s chairman for Asia, more than 40% of the auction house’s buyers of contemporary art are now millennials. The Art Basel & UBS Survey of Global Collecting 2023 reported that “millennials spent a median of $59,785 on art and antiques during the first half of 2023, while for Gen Zers, the figure was $56,000.” The rise of the online art market has also led to a spike in younger buyers, with buying at an auction more popular than more traditional methods.

Despite the growing investment in art in China, it is not all good news. Artnet’s The State of the Art Market analysis outlined how the total sales of work by Asia-Pacific-born artists have been dropping over the past 10 years. Between 2013 and 2023, the total sales of Asia-Pacific-born artists fell by $1.5 billion, and the number of lots offered dropped by around 23%. In comparison, the Northern American and European sales have remained steady. The $3 billion and almost $6 billion in sales in 2023 for North American- and European-born artists formed 65% of the $13.9 billion global fine art auction market in 2023.

The two art markets demonstrate that there is still a robust and thriving art scene across the world. At the moment, the Chinese art scene is in a much healthier position. However, many experts predict the US market, boosted by its steady number of sales from top artists, will bounce back in the near future.