2021 Art Basel Global Market Report Reveals 22% Drop in 2020 Sales to $50 Billion

Across the international art market, sales of fine art and antiques generated an estimated $50.1 billion in 2020, down 22% from the 2019 total of $64.1 billion, according to the 2021 annual Global Art Market Report sponsored by Art Basel and UBS and written by art economist Clare McAndrew. The result is an even greater fall of 27 percent from the $67.4 billion achieved in 2018. Online sales of art and antiques reached a record high of $12.4 billion, doubling in value over 2019 and accounting for a record-high market share of 25% up from last year’s 9%—the first time the share of e-commerce has exceeded that of retail sales in the market at-large.

The international market has seen a return to a level between 2009 and 2010, the years of the last major recession. In 2009, the market fell by in value by 36% to a low of $39.5 billion but jumped back to $57 billion by 2010. The United States, United Kingdom, and China—the three top market contributors—composed 82 percent of the sales total, on par with the 2019 result. The U.S. still ranks as the highest-grossing art market, posting a 42 percent share with a total of $21.3 billion in annual sales, falling by 24 percent from the 2019 total.

The U.K. and China maintained market shares of 20 percent each. Sales in the U.K. fell by 22 percent from the previous year. Greater China only fell by 12 percent achieving an estimated $10 billion in sales overall.

“The markets that will flourish will continues to be the ones like Hong Kong, New York and the U.K, that encourage a healthy flow of trade in and out of those hubs,” said McAndrew in an interview.

In auction sales, China surpassed the U.S. for 2020. That remarkable statistic is a result of the strong outcomes in Hong Kongs modern and contemporary auctions held at the end of December. China’s share of auction value was 36%.  The US had a 29% share.

“It just shows the market is there,” McAndrew said. “Its the supply issue that holds back the auction market in China.” The Chinese art market has typically been strong for lots priced from $50,000 to $1 million. This year, China surpassed the U.S. in the number of auction lots sold sold at or above $10 million.

“The fall in sales was inevitable,” said McAndrew. “But the crisis also provided the impetus for change and restructuring, the most fundamental shift being the rollout of digital strategies and online sales.”

Notably, the gallery sector saw a 20 percent drop in sales to an estimated $29.3 billion. Private sales at auction houses increased to an estimated $3.2 billion in 2020 (up 36% from 2019.) Meanwhile, global public auction figures saw a  30 percent overall drop to $17.6 billion. This decline in worldwide auction sales was widely anticipated because of pandemic closures and is mainly attributable to contracting supply and canceled sales, not a collapse of demand.

McAndrew’s survey of 2,569 high net worth collectors found that the habits of Millennial and Gen Z buyers will be crucial in shaping the future of the art market, the economist said. Millennial collectors were the highest spenders in 2020, with a median expenditure of $228,000 and 30% having spent over $1 million (versus 17% of Boomers).

“They keep on being consistently shown as the most active segment,” McAndrew said. The Boomer generation of art collectors, remain “hugely important” but having already amassed large collections they are not acquiring works as actively. “There’s a limit to how they want to expand.”

Among emerging collectors, there is still a gap in the trade’s capacity to cultivate new clients. “It wasn’t a great year for reaching out to completely new people,” said McAndrew.

One of the predictions from the mid-year report issued in September was that there could be a growing divide in the markets’s top and low ends, leading to greater concentration of value at the top. This trend is a potential concern for art fair organizers, as an increase in online sales does not mean a more level playing field, says McAndrew, despite hopes among smaller galleries for a more democratized art fair marketplace. Across 364 fairs surveyed, 61% were cancelled, 37% held live events, and 2% of fairs held hybrid events.

“The more crowded the online space becomes the more difficult it is to stand out,” McAndrew observed. “These kinds of things are problematic in the long-run. You might get this kind of hierarchy of only VIP people going to real fairs and then there’s this huge mass market online.”

On whether or not national political unrest has an affect on the art buying and selling trends among high net worth individuals, McAndrew says the survey supports the notion that there exists a social drive among wealthy collectors to buy art as a way to show support of the cultural sector.

“At the high end, there has been a built up of high net worth wealth,” noted McAndrew, explaining that wealthy patrons with significant capital haven’t had the same spending opportunities during the last year as a result of pandemic restrictions. “Its a different type of crisis,” said McAndrew on the differences between now and the last market crisis in 2009. “The period last year from March to December, billionaire wealth grew by about 30 percent, where as in the last global financial crisis it tanked by about the same amount.”