New wealth and financial diversification accelerated a number of alternative assets last year, especially art. The 2021 art market grew nearly 30 percent to reach $65 billion in sales, surpassing pre-pandemic levels. The Art Basel and UBS Global Art Market Report 2022 indicates that public auction sales of fine and decorative art rose to an estimated $26.3 billion, 47 percent more than 2020. Private sales by auction houses flourished too, reaching a total of almost $4.1 billion, 32 percent greater than the 2020 figure of $3.1 billion. Notably, twice as many $10 million+ artworks were sold last year, according to Artprice, an art industry database.
Painting was the most popular medium for art collectors in 2021.
Josh Baer, Founder and CEO of The Baer Faxt, an art advisory, says, “The increase of global billionaires is driving the market. Thirty years ago, maybe five of the Fortune 500 CEOs collected art. Now, it’s probably closer to 490.” What makes UHNWIs unique art collectors is that they are usually very savvy, well-advised and make educated acquisitions, because of who they are and what they have access to. As Sylvain Gaillard, Opera Gallery Dubai Director, explains, “Major galleries and auction houses will confirm that UHNWIs have been the driving force behind the art market over the last 24 months.”
#10 SALE IN 2021
Jackson Pollock – Number 17, 1951.
Last year, the recovery of the art market’s uppermost echelons was particularly strong, states Marc Spiegler, Global Director at Art Basel. The highest rise in year-on-year sales was 35 percent in the segment of dealers between $5 million and $10 million.
Andy Warhol – Sixteen Jackies, 1964.
Dr. Clare McAndrew, Founder of Arts Economics and author of the UBS report, says, “Since it is so important to see a highly-priced artwork before buying it, the return of physical fairs and gallery exhibitions buoyed sales in 2021.” Taking a genuine interest in a masterpiece—doing research on it and appreciating it in person— before ultimately owning it is not only important, but the bigger buyers have actually accelerated the top art market’s demand-driven cycle by paying top dollars for what they love.
#2 SALE IN 2021
Jean-Michel Basquiat – In This Case, 1983.
Courtesy Christie’s Images LTD. 2022
The three most expensive paintings auctioned last year were Pablo Picasso’s Femme Assise Près d'Une Fenêtre (over $103 million), Jean-Michel Basquiat’s In This Case (more than $93 million) and Sandro Botticelli’s Portrait of a Young Man Holding a Roundel (exceeding $92 million).
Cy Twombly – Untitled, 2007.
Courtesy Christie’s Images LTD. 2022
“I believe we need to stay attentive and see how the market evolves to continually cater to UHNWIs,” says Gaillard. “One thing’s for sure: prices will keep on rising across the board. For how long is the real question. The market is pressured to offer alternatives to collectors in a saturated market in order to satisfy their growing appetite for new names or styles.”
Art collecting is driven by passion, ownership and financial diversification.
Philip Guston – Strong Light, 1976.
Seven out of the top 10 artworks auctioned in 2021 were paintings, making the medium a winner last year. The preference for Post-War and Contemporary Art, by artists born after 1910, made it the largest sector of fine art auction sales. Gaillard continues, “From what we’ve observed throughout the 13 galleries of our network, it looks like 20th-century masters are still very much in demand. While Contemporary Art often takes the spotlight, we’ve seen a renewed appetite for blue chip artists like Marc Chagall, Joan Miró and Jean Dubuffet, to name a few.”
Gustave Caillebotte – Jeune homme à sa fenêtre, 1876.
Artists who have the highest compound annual growth rate (CAGR) considering the 15-year period between 2005 and 2020 include Yayoi Kusama, in first place with 22.2 percent, followed by Zao Wou-ki, 17.2 percent, and Jean-Michel Basquiat, 16.7 percent, according to ARTBnk, an artificial intelligence-driven platform providing art valuations. In the Post-War segment, collectors are searching for undervalued artists. Gaillard points out a renewed interest in European artists of that period such as Pierre Soulages, Hans Hartung and Hermann Nitsch. Meanwhile UHNWIs have created a new demand for extra-large canvases and monumental sculptures for their private residences, perhaps as a result of spending more time at home following the onset of the pandemic.
The top end of the art market recovered the most in 2021 through sales of $10M+ lots.
#1 SALE IN 2021
Pablo Picasso – Femme assise près d’une fenêtre (Marie-Thérèse), 1932.
The art market can grow even further as new collectors join in and mature over time. The report by Art Basel and UBS shows that Gen Z collectors allocate over 30 percent of their wealth to art, the highest average among collectors. Right now, millennials are one of the fastest growing demographics of collectors, according to Nathan Clements-Gillespie, Director of Frieze Masters.
Willem De Kooning – Untitled XXXIII, 1977.
He points out several characteristics of the younger cohort. “Millennials are adept at navigating the online sphere. They are more comfortable buying artworks online or via apps, having embraced digital media, he says. “We also know that some are willing to start collecting at a very high level, focusing on top works rather than material that would typically be considered entry level.”
#5 SALE IN 2021
Alberto Giacometti – Le Nez, 1947.
“What is common to both millennial and traditional collectors is that the social aspect of collecting is very strong. They are drawn to the art world for everything that goes alongside it, be that fairs, must-see exhibitions, dinners and events,” continues Clements-Gillespie.
Like seasoned collectors who know what they love, their interest can motivate certain purchases. Clements-Gillespie continues, “We know that millennial collectors tend to focus on Contemporary Art, often those that engage with current political and social values. There is of course also a contingent that are drawn to NFTs.”
As their buying power increases, one question is how the influx of NFTs and their millennial UHNW collectors will affect the market’s future.
Gerhard Richter – Abstraktes Bild, 1993.
UHNW wealth swelled to $42.9 trillion in 2021, up by 54 percent from 2016 and almost double the figure of a decade ago, according to the 2021 Wealth-X Ultra-Wealth Report.
#6 SALE IN 2021
Vincent Van Gogh – Cabanes de bois parmi les oliviers et cyprès, 1889.
Baer says, “You can’t mention millennials without emphasizing crypto and NFTs. The art world is praying that just a few of these collectors morph into traditional art collectors too.” Considering the sale of art and collectibles-related NFTs had already reached 17 percent of traditional art sales in 2021, and the value of trades is still growing in 2022, it is likely that the upward trend will continue.