Pictured: Lot82 Vladimir Grigoryevich Tretchikoff- Lenka’s Family. On view at Sotheby’s Oct 2023
HNW individuals spending less on art
This same report found in their survey of collectors that they were spending less on art.
In 2021, 48% of collectors were willing to buy works over US$100,000, whereas in 2022 only 31% indicated they would do so. The percentage of big spenders who could afford artworks over $1 million also fell substantially from 12% to 4%. The first quarter of 2023 saw an upward shift in these percentages, but it was reported to be marginal.
Yet as a market for an artist’s work is not necessarily linked to financial markets, certain artworks are viewed by some as a hedge asset. The Artnet Index Report shows that art is a reliable investment in times of economic strife, given that “fine art exceeded the S&P 500’s performance between January 2022 and July 2023”.
However, as the UBS report identified 43% of the HNW collectors in their survey are borrowing money to buy art, increased interest rates could have a direct impact on their art acquisitions, as could a need for more liquid or income-producing assets.
In South Africa, “art-related wealth management strategies to preserve or grow wealth are yet to take form in South Africa. Investors here are still primarily motivated by their own interest and passion to collect,” believes Ramatlo.