globalEDGE Blog: Worldwide Art Sales Projected to Fall

Worldwide Art Sales Projected to Fall

File under: Economy, Art Industry,

Art sales reached an incredible peak over the past few years. Billionaires and other wealthy art enthusiasts around the world have taken joy in paying exorbitant prices for pieces by both well-known and up-and-coming artists. Many of these pieces are fed into personal collections, some of which are put on display. The art collecting habit, popular among the global affluent, has driven prices of popular art to the hundreds of millions. Big name international auctioneers have thrived and the industry has reached unprecedented levels of prosperity. However, 2015 saw a decrease in reported sales for the first time in six years, causing many to believe the art boom is starting to decline.

New York City-based companies Christie's and Sotheby's are the two biggest fine arts auctioneers in the world. Thus, their art sales are considered prognostic of the state of the industry. The companies released their 2015 sales figures just last month, revealing that their year-over-year sales had decreased for the first time in five years. While the percent decreases were relatively small (five percent at most), the figures were still startling, considering both auction houses had just experienced a period of consistently increasing sales. While the decline is not sharp enough yet to consider the industry a burst bubble, it could be indicative of a continued downward spiral. Much of this can be attributed to the reduced buying habits of the international wealthy. Until now, high-value art always had a welcome market in Russia, Brazil, and especially China. However, China's recent economic problems have caused former enthusiasts to cut down on frequent art purchases. Russian art sales have suffered a similar fate.

Art collectors, now forced to be more frugal, have shifted their shopping trends. Many are exclusively curating work by the icons of the art world; artists at the caliber of Picasso and Monet. Of course, this leaves younger artists in the dust, making it difficult for them to break into the market. Recent prices for contemporary art are reflecting this trend, having taken a fourteen percent plunge last year. Meanwhile, other wealthy collectors are looking into countries where art prices are still relatively low, such as Singapore, India, and several countries in Africa. This may continue to drive down art prices in countries where extravagant prices were common in just the past few years.

Whichever state the art industry finds itself in, it is guaranteed that 2016 will be a trying year. If global economic problems continue to affect the richest countries in the world, fine art and other luxury items will continue to see diminishing sales.

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