Report: 54pc of HNW collectors plan to buy art in 2024

November 3, 2023

Crowds viewing art at Art Basel in Basel, Switzerland. Image: Art Basel, UBS

Fifty-four percent of high-net-worth collectors were planning to buy art over the next year, which was comparable to 2022.

Some of the most active buying plans were reported by collectors from mainland China, with 68 percent intending to purchase works, along with large majorities in Japan, Brazil and Italy. The findings were reported in The Art Basel and UBS Survey of Global Collecting in 2023 report prepared by Clare McAndrew of Arts Economics for Art Basel and UBS.

“The background to the survey continues to be volatile, with a high interest rate environment, an ongoing war in Ukraine, and escalated tensions in the Middle East,” said Noah Horowitz, CEO of Art Basel, in the report.

“A double-digit fall in auction sales in the first half of the year underlines some of the challenges within the business,” he said.

“Nonetheless, international trade in art and antiques remained vibrant in the first quarter of the year, with notable increases in the world’s major art markets, including Hong Kong, the United Kingdom and the United States.

“This was underscored by the vibrancy of Art Basel Hong Kong, which took place in March, and many new Asian collectors in evidence at the Swiss edition of the fair in June.

“HNW collector confidence remains strong, with those surveyed increasing their spending year-on-year, and mainland Chinese collectors recording the highest spending of all regions in the first half of 2023 – a strong return after lockdown.”

This edition of the Art Basel and UBS Survey of Global Collecting was the largest so far, with 2,828 high-net-worth (HNW) collectors from 11 key regions participating. The report itself is an impressive 149 pages chockfull of trending data and insights on art, collectors and market movements.

Painting a picture
Per the survey, paintings remained the most popular choice for planned purchases (84 percent), followed by sculptures and works on paper.

Twenty-six percent of collectors planned to sell works from their collections over the next 12 months, down from 39 percent in 2022, with most reporting that they would hold off on selling because they believed the prices of their artists’ work would improve in future.

Despite ongoing turmoil in the financial sector, high inflation, the continuing impact of three years of COVID-19 and the ongoing effects of the war in Ukraine, 77 percent of HNW collectors remained optimistic about the art market’s performance over the next six months, a slightly larger share than were optimistic about the stock market (74 percent).

Return of traditional dynamics
Historians may look back at 2023 as the year the economy stopped being so abnormal, according to Christl Novakovic, head of global wealth management for Europe Middle East and Africa, chair of The UBS Art Board and UBS global lead partner of Art Basel.

“Ever since the great financial crisis of 2008, we’ve had to bend, stretch or even break traditional models for understanding and predicting how people trade and do business,” Ms. Novakovic said in the report.

“This has been the era of ‘whatever it takes’ in monetary policy, the rise of China, the global pandemic, a surge in populism, and the return of war to Europe,” she said.

“Now, however, it is starting to feel like the global economy – despite all of this – is returning to traditional dynamics where interest rates combat inflation on a battlefield of jobs, goods and services.

“As we move into the final quarter of the year, the economy looks closer to being in balance, inflation indicators are pointing down, labor markets are cooling and economic activity points to resilience. It’s not too much of a stretch, as we prepare for year-end holidays, to even be optimistic.”

Here are the key findings from the report in its own words:

Indicators from the auction sector revealed a more subdued market in the first six months of 2023.

Aggregate sales at the major international auction houses of Christie’s, Sotheby’s, Phillips and Bonhams were down by 16 percent in H1 2023 on the same period in 2022, although still exceeded the first half of 2019, and accounted for 84 percent of values sold in 2022, a record year for some of these companies.

Trade statistics showed a vibrant exchange of art and antiques across borders in 2022 and early 2023.

Imports of art and antiques reached their highest-ever level of $30.7 billion in 2022 and exports their second highest at $33.4 billion.

While global imports across all industries were down in the first quarter of 2023, the value of inflows of art and antiques to key hubs continued to grow, including double-digit increases in Hong Kong (50 percent), the United Kingdom (38 percent) and the United States (15 percent).

HNW collector spending
The median expenditure on art and antiques by high-net-worth (HNW) collectors surveyed across 11 markets worldwide reached $65,000 in 2022, up by 19 percent on 2021.

The median level in the first half of 2023 was reported at $65,000, indicating a potentially substantial rise for the year if spending continues.

Median expenditure increased in nearly all markets in 2022, with some of the largest advances in the U.K. and Taiwan (both up by 30 percent), with more moderate growth in the U.S. (5 percent) and Hong Kong (2 percent).

After a decline of 6 percent in 2022 to $202,000, collectors from mainland China reported the highest median expenditure in the first half of 2023, at $241,000, showing a strong return to spending post-lockdown.

The majority of spending so far in 2023 was on paintings (58 percent), with works on paper the second-largest component (13 percent).

Mainland Chinese collectors’ spending on paintings was nearly four times the average, and up by 20 percent on 2022. They were the highest average spenders in several other mediums, with the notable exception of digital art.

The share of spending on digital art was just 3 percent of HNW collectors’ total expenditure in 2023 so far, and digital artworks made up 8 percent of their collections, down from 15 percent in 2022. This decline parallels trends on external NFT platforms, where, by mid-2023, sales of art-related NFTs had fallen to their lowest level since January 2021, with monthly turnover at about 2 percent of the value at their peak later that year.

Gen X collectors outspent their younger peers in some of the largest-value mediums in 2023, averaging the highest overall spending for paintings ($145,000 against $108,000 for millennials). They were also the highest spenders on works on paper, although millennials still spent more on sculptures, installations, photography, and film or video art.

Gen Z collectors had the highest average expenditure on prints and digital art, indicating that these could be important and accessible mediums for younger collectors entering the art market.

HNW collectors spent less on works by female artists in 2022 and 2023 (with a ratio by value of 39 percent female to 61 percent male), and the share of works by women in collections decreased by 3 percent year-on-year to 39 percent in 2023, reverting to the 2020 level.

However, collectors spending more than $10 million per annum tended to have both a higher share of female artists’ works in their collections (54 percent), and their proportion of spending also increased from 46 percent in 2021 to 55 percent in 2023.

This could indicate that, although undertaken by a minority of collectors, some of the spending at the very highest levels was on female artists.

The share of collectors most commonly focused on buying works of art priced at more than $1 million fell substantially from 12 percent in 2021 to 4 percent in 2022.

There was some revival of those spending at higher price points in the first half of 2023 (9 percent). However, even with these increases, levels were below those of 2021 and previous years, pointing to possible buyer caution and an increasingly thin high-end following the strong post-COVID-19 bounce back in sales.

The average allocation to art in the wealth portfolios of HNW collectors fell to 19 percent in 2023, from a peak of 24 percent in 2022. This is potentially indicative of a more cautious approach to collecting, with a greater focus on more liquid financial assets, or less inclination to spend on discretionary purchases than in previous years and higher opportunity costs.

The size of the allocation to art rose positively with collector wealth, ranging from an average of 15 percent for those with wealth of under $5 million to almost 30 percent for ultra-high-net-worth (UHNW) collectors with wealth of more than $50 million.

HNW collector buying channels
The resurgence of in-person buying continued in 2023.

Eighty-six percent of HNW collectors purchased from a dealer, and of those, 84 percent bought in person from their gallery or premises (up from 73 percent in 2022). Fifty-eight percent made a purchase at an art fair, down from 74 percent in 2022, although still higher than 2021 (54 percent).

Auctions were the next most widely used sales channel for collectors, with around three-quarters of respondents having bought at auction in the first half of 2023.

Just under half (47 percent) of total expenditure in 2023 was conducted through dealers, up by 2 percent on 2022.

Including art fairs, the share of spending through dealers was higher in every market, with the narrowest margin in mainland China, where spending at auction accounted for 35 percent of the total versus 41 percent through dealers (28 percent excluding art fairs).

There was little evidence of any significant broadening of focus in terms of the galleries that HNW collectors purchased from, with a stable 46 percent only buying from dealers they knew.

While risk aversion may be an important factor, the trend to staying with established galleries may also indicate the success of some businesses in managing to maintain a steady collector base.

HNW collectors dealt with a relatively balanced share of local versus overseas galleries in 2023.

However, there was a slight shift in preferences away from local galleries, with around half of respondents preferring to buy from a local gallery if given the choice, down by 6 percent on 2022.

For the remainder, a stable 24 percent preferred overseas galleries, and the most popular regions included France and Japan, mirroring the strong interest also reported in French and Japanese artists.

HNW collectors were being more selective about event attendance, reporting that they would attend 32 art-related events in 2023, nine less than in pre-pandemic 2019, with a small reduction (of one event) in gallery exhibitions, art fairs and artist studio visits, and a more substantial drop in biennales and other large visual arts festivals (down by three) and live auctions (down by two, and paralleling a lower number of live auction sales in the major auction houses).

Looking ahead to 2024, most collectors (92 percent) were planning to continue to attend art-related exhibitions and events, either the same number (43 percent) or more than they did in 2023 (49 percent).

HNW collector motivations
When asked for the most important motivation in purchasing a work of art, self-focused drivers such as self-identity and personal pleasure were ranked highest (37 percent of collectors), followed by financial motivations (28 percent).

Relationships, including social and networking motivations for collecting and being part of the art market, ranked third (14 percent).

Despite a low 10 percent identifying themselves as ‘investors,’ many HNW collectors actively traded in and out of their collections.

Just under half (48 percent) had resold works from their collections, including 38 percent having done so during 2022 and 2023, although this was significantly lower than previous research in 2020 (60 percent) and 2021 (49 percent).

Only 5 percent of collectors bought and resold works within a year, but 39 percent reported an average resale period of up to three years (up from 30 percent reported in 2021), and most collectors (83 percent) did so within five years.

Forty-three percent of HNW collectors had used credit or loans to finance purchases of art, including 30 percent in 2022 and 2023.

For those who used lending, the average share of the value of their collections financed through credit was 29 percent. The average share for UHNW collectors was higher at 39 percent, and one third of this segment had financed over more than percent of their collections with loaned funds versus only 2 percent of those with wealth of less than $5 million.

More than half (54 percent) of financially motivated collectors used credit or loans to purchase art (versus 39 percent with non-financial motivations).

Please click or tap here to download The Art Basel and UBS Survey of Global Collecting in 2023 report

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Report: 54pc of HNW collectors plan to buy art in 2024

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