The global art market bounced back from its biggest recession in 10 years to end 2021 on a high, even before last year’s craze for non-fungible tokens (NFTs) was factored in.
Total sales of art and antiques jumped 29 per cent from $ 50.1bn to $ 65.1bn, according to the annual Art Market Report compiled by economist Clare McAndrew for the Art Basel fair group and UBS bank. Overall, sales nudged ahead of their pre-pandemic total ($ 64.4bn), though pockets of the top-heavy market – including the UK and the dealer sector – did not recover fully, while varied restrictions continued to hamper the art fair industry.
The 2021 total includes Christie’s $ 69.3mn sale of Beeple’s NFT, “Everydays: The First 5000 Days” (2021). But much of the sky-rocketing market for NFT-backed art and collectibles is separated out, as these transactions are generally conducted outside of the report’s traditional framework of auction houses, dealers and art galleries.
McAndrew finds that art and collectible sales on the Ethereum blockchain alone totalled $ 11.1bn in 2021, up from $ 30mn in 2020. The average price for an art-related NFT in the dominant secondary (resale) market rose from $ 265 in 2020 to $ 5,485 in 2021, the report finds, while the average turnround of art NFTs was 33 days – in stark contrast to the average resale period on the traditional art market of 25 to 30 years.
“The rapid trading makes it clear that this space more resembles meme stocks than art for now, ”says Marc Spiegler, global director of Art Basel.
Back in real life
Art sales were up significantly in most regions, though boosted by much-improved online platforms. The US again led the pack with a market share of 43 per cent and a total of $ 28bn of sales, on a par with the pre-pandemic year of 2019. Greater China retained its 20 per cent market share, with sales up 35 per cent to $ 13.4bn, comfortably ahead of its $ 9.9bn total in 2020 and $ 11.7bn in 2019. The report notes that China’s art market structure has expanded, with at least 25 new auction houses and nearly 30 fine art galleries opening in 2021, while domestic trade in cultural relics has been stimulated by a zero-import tariff on works more than 100 years old.
The UK has fallen from second to third spot in terms of market share, down from 20 to 17 per cent in 2021. Sales were up overall, to $ 11.3bn from $ 9.9bn in 2020, but still below their 2019 levels as the impact of Brexit – which means that imports from EU states are now subject to VAT – “created concerns for businesses in the art market,” McAndrew writes.
All three sales regions remained dominant, the report finds, but there are signs that other countries are on the up. The report highlights France, where market share has moved from 6 to 7 per cent and total sales were up 50 per cent to $ 4.7bn: music to the ears of the report’s co-publishers Art Basel, which opens its first fair in Paris later this year.
Despite such new openings, the number of in-person art fairs fell significantly as the pandemic’s restrictions varied across the world. McAndrew finds that 240 physical fairs were held in 2021, more than one-third down from the 387 recorded in 2019. At least 35 fairs have closed completely since the start of the pandemic, with more disruption expected: “The calendar for the year ahead  remains insecure and many fair businesses are under extreme pressure, ”McAndrew writes.
Restrictions also meant that art fair visitor and exhibitor numbers were down on 2019.
Auction sales were the biggest contributor to the market’s growth last year, up 47 per cent on 2020. Gains were notably high in the US where auction sales had fallen 46 per cent in 2020, yet were up nearly 70 per cent last year. All of 2021’s top 10 most valuable works were sold through New York, including the Beeple at number eight.
Online sales continue to play a significant role for auction houses and third-party platforms at all levels. But it is the top-tier auctions of mostly 20th- and 21st-century art, operating in-person and livestreamed across the world, that came into their own last year. The report finds that just three auction houses – Christie’s, Sotheby’s and Phillips – accounted for nearly 80 per cent of the value of fine art sales in 2021.
There is more of a mixed picture in McAndrew’s proprietary survey of 774 established dealers across 50 regions. Their aggregated revenues were up 18 per cent, not quite making up for the 20 per cent fall recorded in 2020.
While the art market may have grown as a whole, choices narrowed. Dealers report sales concentrated through fewer buyers who focused on the most fashionable artists, predominantly in the blue-chip contemporary field. McAndrew records dealer disappointment with a “lack of progress toward a more egalitarian model” and throughout the report expresses discomfort at the top-heavy nature of wealth in the art market, which has been intensified by the pandemic. Businesses with an annual turnover of between $ 5mn- $ 10mn made the biggest gains through 2021 (sales up 35 per cent), while those with a turnover under $ 100,000 lost an aggregate 8 per cent.
Fuelling this, as ever, was the growing concentration of global wealth. Both millionaire and billionaire wealth grew – by 11 per cent and a staggering 19 per cent respectively, the report finds.
There is no mention of Russia’s war on Ukraine and the impact that this could have since the report closed at the end of 2021. But its wealth figures, including a survey of 2,339 high-net-worth collectors by Arts Economics and UBS Investor Wealth, give an indication of Russia’s relative purchasing power: the country accounted for 5 per cent of billionaire wealth in 2021, on a par with India and Germany, but significantly below the US (37 per cent) and China (20 per cent).
Regarding the outlook for 2022, McAndrew tells the FT: “The horrors of Russia’s invasion are likely to continue to shift the focus away from discretionary purchasing, as many buyers and sellers find it inappropriate to focus on high-end art purchasing while a war and humanitarian crisis like this are unfolding before our eyes. ”