Art buyers are bidding less at auction houses, dealers are bidding more on online success, and the U.K. is bidding farewell to the pre-Brexit trade market. These are just a few of the top art market insights from the 2017 Art Market Report released by The European Fine Art Foundation (TEFAF).
Founded in 1988, TEFAF is a non-profit organization that hosts some of the world’s leading art fairs in the Netherlands and New York City. Along with hosting these annual events, TEFAF partners each year with the online platform Artnet to release the TEFAF Report, which provides a comprehensive look at the art market from the previous year. Prepared by art finance professor Dr. Rachel A. J. Pownall, the report uses auction data and art price index figures from the Artnet Price Database, surveys of private art dealers, and trade data for imports and exports.
In the report’s foreword, Artnet CEO Jacob Pabst noted that the TEFAF Report is “widely regarded as the most comprehensive summary of the art market,” and its 115 pages of findings and statistics seem to confirm that statement. The full report can be found here for those who want to read it in its entirety; for everyone else, here are five key takeaways on the trends and challenges in the art market from the report.
Art Auction Houses Are Selling Less
Art sales are going, going, but not quite gone from art auction houses. In 2015, public art auction sales of art, high-end jewelry, and decorative arts was $20.8 billion globally; in 2016, that figure dropped to $16.9 billion, and the news has the art market wondering. Art buyers who aren’t picking up an auction paddle are turning towards the private sector, with dealer sales making up over 62% of global art sales. Boosted by greater access to information, buyers are more confident in their transactions with dealers and galleries, and they also appreciate the pricing transparency that they can’t find on the art auction floor.
Even with this global increase in private sales, art auctioneers won’t be packing up their gavels anytime soon, particularly in Asia. While the U.S. saw a huge drop of 41 percent in art auction sales revenue for 2016, Asia experienced less than a 2 percent dip over the same year. In fact, Asia currently has the largest share of global auction sales, up from its 31 percent share in 2015 to over 40 percent last year.
That collectors are turning to galleries and private dealers more and more is actually great news for emerging artists, as generally speaking artists at auction are usually well-advanced in their careers. While the auction market doesn’t seem to be going anywhere, its slow-down signals an opportunity for artists who are wondering how to get themselves in front of buyers that collect art – go after the galleries and make connections with private dealers.
The U.S. is Leading the Art Market
Good news for artists based in the United States: Though the U.S. may no longer be the top art auction market, its nearly 30 percent share of the overall art market puts it ahead of both Europe and Asia. The U.S. also leads the world as the largest trading country, thanks to art and antiques imports totaling $11.66 billion dollars in 2015, the U.S. leads the world as the largest trading country — exports for the same year were only slightly lower at $11.03 billion dollars. America is equally strong in its currency as the dollar holds strong and raises expectations for dealer sales growth in 2017. However, the strong dollar has had a negative effect on international sales outside of the U.S. as global art prices fell by nearly 9 percent.
It’s likely no surprise to artists living outside the U.S. that the U.S. art market is one of the largest in the world – but if you’re struggling to break into it, it might be worth looking into available resources for international artists. Apply to residencies in the U.S., find online platforms that can connect you to other artists and art buyers, or consider doing a post-grad degree at a U.S. university.
Art Fairs Attract Buyers
With more art purchases shifting the art market from public auctions to private sales, dealers must focus on the key component of making those sales: buyers. Nearly 72 percent of dealers identify new client acquisition as their top business concern, but that concern doesn’t seem to come with much worry as over 76 percent expect to see an increase in clients during 2017. Optimism for achieving future sales is great, but art fairs for meeting current buyers is even better, according to the TEFAF report. While dealers anticipate seeing more sales from international art fairs compared to local ones, the overall art fair scene is proving to be one of the most important sales venues for acquiring new buyers. Likewise, the value of art fairs explains why 49 percent of dealers identify “costs associated with exhibiting at art fairs” as one of their top five business concerns.
These findings aren’t exactly surprising, but they are somewhat contradictory. Often times, gallerists feel that attending art fairs isn’t exactly an option – you’re ‘expected’ to be there, but once you arrive, the traffic and sales are often less than stellar. Still, the exposure seems worth the cost of attending, and if a gallerist can attract even one new client from a fair, it does much to quell one of their top business concerns.
Brexit Breaks Certainty in European Art Trade
While the U.K. remains certain in its decision to leave the European Union, the continent and the rest of the world has plenty of uncertainties about how this decision will impact the global economy and the art market. The brunt of Brexit is already being felt in the art world, with half of dealers predicting the exit will have a negative influence on business. Understandably, European dealers are more concerned than dealers on other continents as 60 percent predict such an unfavorable impact.
Though the report doesn’t point out the specific reasons behind this negative outlook, it seems much of the unrest rests in the unpredictable future of trade as taxes and tariffs could increase as the U.K. reverts to the terms of the World Trade Organization and its trade deals. For instance, 30 percent tariffs on art could become more common as Brexit and overall geopolitical instability signal bigger barriers against the single market and the cross-border trade of art.
Dealers Sell Art Online
Once hesitant to embrace the online trend, the art market is now more invested in the online sector and its accompanying sales. According to the Hiscox Online Art Trade Report, $3.27 billion in sales were made through online platforms in 2015 and if the optimism of TEFAF survey respondents is any indication, that figure could increase in 2017. TEFAF reports that 67 percent expect to see an increase in online art auction platforms and online sales, both through their own websites and through third-party online platforms, even though online sales are typically for lower-end art and antiques. Still, the art world is trying to keep up with online trends — social media is proving to be more than a medium for marketing as sales that took place via Instagram and other social media sites were counted in dealer sales for the TEFAF report.
As the online art market continues to grow, artists would be savvy to get onboard. There are a variety of platforms on which artists and galleries can sell their work, including Artsy, Saatchi Art, and Orangenius. While some take commissions, others allow members to sell their work free of charge – and as the art world continues to grow as a billion-dollar business, having a share of the market will be crucial to an artist’s success.
Did the TEFAF report on the art market bolster or shatter your confidence? Let us know in the comments!