Auction Figures: Following a record-breaking year in 2022, public auction sales declined by 7% to USD 25.1 billion. Notably, the USD 10 million-plus segment of the fine art auction market saw a substantial decrease in value, while certain proportions of middle and lower-priced segments continued to grow. Private sales by auction houses defied the trend and grew by 2% to USD 3.9 billion, bringing the estimated total of public and private sales at auction to USD 28.9 billion in 2023 - a decline of 5% year-on-year. The US, China, and the UK remained the largest auction markets, with a combined market share of 74% of public auction sales by value and down 3% year-on-year. Post-war and Contemporary art remained the largest sector of the fine art auction market in 2023 despite declines in growth since its peak in 2021, representing a significant 53% of global sales by value. Sales of Modern art witnessed a further slowdown in 2023, as well as Impressionist and Post-Impressionist art following their strongest performance at auction in 2022. China’s strong rebound in 2023 contributed to the positive 15% boost in overall sales of Old Master paintings year-on-year to USD 1.1 billion, just below their pre-pandemic level in 2019.

Art Fairs: In 2023, sales at art fairs accounted for 29% of dealers total revenues, marking a 6% decline from the robust return observed in 2022 and surpassing the levels seen in 2021 (27%). Dealers with turnovers exceeding USD 10 million expressed the most optimism for 2024, with 50% expecting an increase in art fair sales, despite their share of sales at art fairs decreasing from 40% of annual sales in 2022 to 30% in 2023. There was also a positive outlook overall among dealers, with 39% predicting an increase in art fair sales in 2024, 46% expecting a stable year ahead, and only 14% anticipating a decline.

Online Sales: Global online sales grew in 2023 increasing 7% year-on-year and reaching an estimated USD 11.8 billion. Although down from a peak in 2021 of USD 13.3 billion, sales remained almost double the level of 2019 or any year before that and accounted for 18% of the market’s total turnover. Online sales in the dealer sector, including those made directly and through third parties, accounted for 23% of all dealer sales in 2023, up by 7% in share year-on-year, and on par with 2021. The biggest growth was driven by dealers’ own online channels and websites, which accounted for 20% in 2023, up from 12% in 2022.

NFTs: Following their peak of USD 2.9 billion in 2021, the downward trend in sales of art-related NFTs outside the art market continued in 2023. Sales of artrelated NFTs on NFT platforms fell to USD 1.2 billion in 2023, down 51% yearon-year but still over 60 times the size of the market in 2020. Across the two segments of art-related NFTs and NFT collectibles, the value of art-related NFTs fell from its majority share of 67% in 2020 to 16% in 2023, compared with 84% for NFT collectibles.

Paul Donovan, Chief Economist at UBS Global Wealth Management, said: "The art market continues to prove its resilience. Alongside the strength of financial markets, expected declines in interest rates, and weakening inflation, this offers hope for 2024. We are observing a shift in the luxury market away from goods purchases towards spending more on “having fun”- leisure travel, entertainment, and socializing. Art is so much more than possessing physical objects – and the events, experiences, and social networks associated with collecting should provide support for the sector."

Outlook: Looking ahead to 2024, 36% of dealers expected an uptick in sales, while 48% expected turnover to remain stable, and 16% predicted a decline. Compared to the end of 2022 when the smallest dealers expressed the most optimism, in 2023 the largest dealers were most hopeful, with 54% expecting an increase. The effects of political and economic uncertainty were ranked as the biggest challenge by most dealers, followed by a focus on maintaining relationships with existing clients – a priority echoed since 2020. The cost of travelling to and participating in art fairs ranked as the third-largest challenge. While maintenance of current relationships was a primary concern for dealers in 2023 and 2024, they also noted the longer-term importance of expanding their geographical presence to reach new collectors. In the auction sector, optimism was relatively high for 2024, with 38% of the mid-tier auction houses surveyed expecting an improvement in sales, while only a small fraction (4%) predicted a drop in their own sales – a significant decrease from 24% in 2022.

Adrian Zuercher, Head Global Asset Allocation, UBS Global Wealth Management CIO, said: "In the wake of easing COVID-19 restrictions, China’s art market has increased by 9%. This follows a similar pattern to the response we saw in other markets around the world in 2022, which reported an initial post pandemic boom followed by reports of slower sales and the pace of increase moderating. Like other regions, the luxury industry in Asia has also encountered a shift in spending on entertainment and experiences. This applies to the Asian art market too, where many art world fairs and events have resumed their full scale and visitors have returned with enthusiasm. From a wider economic perspective, growth in Asia is forecasted for 2024, driven by a shift in policy easing and a moderate expansion in regional exports."