Declining representation in affluent portfolios, decreased spending from next-gen investors, and other forces are converging to form a complex picture.
The art market is nearing a critical inflection point, according to a new 2024 survey of global collecting from Art Basel and UBS.
Rich people are getting richer, but art represents a lower percentage of their net worth than in years past; meanwhile, a core group of dedicated collectors report that they plan to attend fewer art-related events than before, even though they favor in-person acquisitions by a large margin. On top of this, a slow-moving tsunami of wealth is transferring art from the hands of an older generation into a younger one, even as the youngest generation of collectors appears to be pulling back from the market.
Taken together, the report paints the picture of a collecting class in flux, whose changing behavior and taste could have serious implications for a market still in recovery.
“When you look back over the last 10, 20 years, the market has roughly hovered in sales value around that $60 billion to $65 billion price point,” says Noah Horowitz, chief executive officer of Art Basel. “But what’s being sold in the composition of that has changed pretty meaningfully. And so I think the question for the future is: Is there a path to further growth in a world where these other dynamics are playing out and changing?”
The Good News
The findings are based on two surveys conducted this summer—one of 3,663 respondents who were active in the market from 2022 to 2024, and the second of more than 1,400 private collectors sampled from Art Basel’s VIP list.
The good news is that people still want to buy art, though what art they’re buying is changing.
For instance, more than half of respondents had bought works on paper in 2023, a category that tends to be cheaper than painting—a sharp jump from the year prior, when just 33% had bought art in that category. Similarly, more than half of high net worth respondents’ expenditure in 2023 and 2024 was on new and emerging artists, who are likely to be cheaper than their more established peers; that’s up from 44% in a previous survey.
Women artists are major beneficiaries of this shift. The share of works by females in high net worth respondents’ collections rose to 44%, its highest level in seven years. Spending on female artists’ work also rose—respondents who spent the most on art (more than $10 million so far in 2024) dedicated the largest share (52%) to works by women.
“Funnily enough, around 44% of sales were female artists, and around 45% of UBS clients are women, a number which has increased by about 5 percentage points over the last few years,” says Paul Donovan, chief economist at UBS Global Wealth Management. “So there’s an interesting potential dynamic there, because it is certainly very possible that within 20 years women will own a majority of global wealth.”
The Mixed News
In 2022, high net worth individuals allocated 24% of their wealth to art. That number has fallen to just 15% in 2024.
This isn’t necessarily because valuations have plummeted or collectors have sold off their holdings, Donovan explains, but rather because art potentially hasn’t kept pace with the rest of collectors’ growing portfolios. “Art prices have not shot up in the way that certain other asset prices have shot up,” he says. “And if you are [investing] in the Magnificent Seven, frankly nothing in the art world is really going to compete with that.”
And yet the fact that wealthy people have not continued to pour money into art at the same proportionate pace could be a sign that softness in the super-high-end blue-chip market will continue.
“In the last year or so, we’re seeing the base doing better than the top of the pyramid, in terms of art sales,” says Clare McAndrew, who founded the research and consulting firm Arts Economics and prepared the report. “It’s kind of thought about in a negative way, because you just see that the top-line figure is dropping for the big auction houses. But the base is getting bigger, and that means more transactions are happening. They’re just not very expensive, secondary-market ones.”
The report also highlights the multitrillion-dollar generational wealth transfer that will occur over the next few decades, offering a nuanced appraisal of how that transfer might occur in the art market.
Specifically, older rich people are transferring their art to their heirs. Some 91% of high net worth individuals owned work that was inherited or gifted (so much for self-made collectors); but of these respondents, about three-quarters planned to sell at least some of the work they’d received.
In that group of sellers, roughly half planned to sell some inherited art because of a lack of space; a similar percentage planned to use the proceeds of the sales to help settle estate taxes. Wealth transfer might translate into more young people being able to buy art, in other words, but it could also represent significant amounts of unwanted inherited inventory hitting the market, which could suppress prices.
The Bad News
In 2023, as the art market began to slump in earnest, millennials decreased their average spending on art by as much as 50%, according to the report. This flips previous narratives about the rising dominance of young collectors on its head.
“It’s always been millennials and younger collectors really pushing the highest spenders, and they were the ones that kind of cooled off in the last year,” McAndrew says, noting that older, Gen X collectors’ spending stayed about even from 2022 to 2023.
But it’s not just millennials. Only 43% of high net worth individuals said they planned to purchase a work of art in the next 12 months (down from about 50% in 2022 and 2023), and those hoping to sell works jumped to 55%.
Of the Art Basel VIPs, the numbers were more encouraging—97% planned to purchase an artwork of some kind in the next 12 months—but even among the die-hards there were some warning signs. They planned to attend both fewer gallery shows and fewer art fairs in 2024 than in pre-Covid 2019, even though nearly 90% of VIP respondents said they “strongly favored” buying art in person, meaning potentially fewer opportunities for art transactions to take place.
Overall, the report paints the picture of a fairly flat art market supported by a collector base on the precipice of serious change.
“The art industry as a whole is still doing relatively well,” Donovan says. “The volume of transactions isn’t down, but it’s just different transactions are taking place now.” It is, he continues, “a structural shift.”