We all have read enough press about art market disruption forced by the pandemic. During the first wave of the COVID pandemic, various international art fairs, top galleries, leading auction houses, artists displayed creative adaptability. Many and with short notice rapidly recreated some of their leading events in digital format. Despite the sharpest economic downturn on record, collectors were clearly in the mood to buy. For example Sotheby’s online-only sales grew year-on-year by 413% in the first eight months of 2020, with less pronounced growth seen by Christie’s (+120%) and Phillips (+52%). Sotheby’s debut livestreamed auction generated $363.2 million, followed by Christie’s event that achieved $420 million. The digitization of sales activity was accompanied by robust price performance. The latest Artcurial sale in Monaco proved once again to be a solid success, even during pandemic international bidders, including Chinese collectors were logging in online to snap their Hermes bag or Cartier watch.
In the first seven months of 2020, the Masterworks.io price-weighted All Art Index, which tracks the art market as a whole was up 5.5%.
Meanwhile, its Contemporary Art Index and Impressionist Index gained 6.7% and 2.0%, respectively.
Juxtaposed with global equities, which were down for the same period, commodities and real estate which like art are considered “tangible” asset classes were down sharply.
One of the reoccurring questions by investors I get is: “what to buy, which art to look at”? My response to them: be guided by your passions combined with performance, quality and provenance.
We have seen that the top end of the market performed best. The weighted Contemporary Art Index experienced a 6.7% gain, versus a modest fall of 1.9% in its unweighted counterpart.
Higher-priced works especially paintings purchased for over $500,000 to $1 million tended to perform better than lower-priced works.
All of this is surprising on quite a few levels. Prior to the pandemic, the art world had proved a reluctant flexibility of adopting the digital technology.
As Anders Pettersen, Founder and Managing Director ArtTactic, writes in the report: “… online sales still accounted for only 6% of total auction sales in 2019, a sign that online sales were merely a sideshow.”
Anders explores some of the reasons for this historical wariness of technological innovation, including a lack of pressure for change. Encouragingly, he thinks the industry has now crossed the digital Rubicon: “More than half of art buyers surveyed by ArtTactic recently said they believed the art world’s move online during COVID-19 will lead to a permanent shift, and that the art market will not revert to normal as we come out of the pandemic.”
The art market’s outperformance of various other asset classes in the first part of 2020 was also not what we might have expected.
Previous crises – including the Spanish flu, the 1970s oil shocks, and the Global Financial Crisis of 2008-09, were all associated with sharp falls in the art market.
The art world’s adaptability in 2020 has also raised hopes that other much needed progress may follow.
Over time, art museums have frequently drawn criticism for their slowness to address issues of diversity, equity, inclusion, and access.
However, the last twelve months have put a spotlight on these vital matters. Let’s hope some of the more inventive collaborations will continue. Initiatives such as augmented and virtual realities will keep testing appetites, while existing non-industry platforms such as Instagram will keep discovery alive. Who knows, we may see a new market place emerge for the art world this year.
Karolina Blasiak
Credit Pictures: Martin Creed's Work No. 1086: Everything is Going to be Alright (2011) at Hauser & Wirth Somerset. © Martin Creed. All Rights Reserved; DACS; Photo: Jamie Woodley
This article is part of Rosemont Art Advisory's monthly newsletter. To receive our newsletter, or for more information, please contact Karolina Blasiak, Art Advisor at k.blasiak@rosemont-mc.com