Today, at a $68B industry, people have to wonder, was the art market always this strong? The art market has been around for centuries, where aristocrats and a small group of wealthy individuals and families would dominate the market buying Old Masters and Impressionist works.
Before the 2000s’ the art market was still a much lower-value market compared to today, with less diversity in terms of artists, buyers, mediums, and subjects. The contemporary market in 2000 generated $90M, where today, as the principal driver of the global art market, the contemporary market alone is worth $2.7B.
Considering the drastic change in the art market between even the 1990’s to today’s $68B market, where there is more diversity in buyers, artists, and mediums, we look at some of the main factors contributing to this quick, expansive growth in terms of value.
There are many factors that have contributed to the growing art market in terms of value over the past two decades, with many of them playing to each other’s advantage. One of the main factors is the rise of wealth around the world. According to Credit Suisse’s 2010 Wealth Report, global net worth per adult rose 43% from 2000 to mid 2010. With more disposable income, more individuals will want to invest their funds to grow their wealth even more. With the art market shifting into an investment or commodity market, and having proved resilience against the economy, many individuals are turning to the art market.
This increase in demand for art, leads to more scarcity of highly valued blue chip artists. This scarcity drives prices up, thus increasing the value of the overall art market. Especially as we move forward in time and paintings from deceased artists are being bought by Museums, these Old Master, Impressionist, and Modern period paintings are limited in supply and becoming rarer by the minute - increasing not only their demand but their value.
Globalization is also a large factor for facilitating the increased value of the art market. With auction houses’ extensive marketing budgets and resources, they were able to penetrate into emerging art markets in the Middle East, Southeast Asia, China, and now Africa. Global connections are made, advisory boards are packed with well-connected people across the world, and newly rich countries are educated on seeing art as an investment. Globalization also allows for emerging art markets and young artists to be connected with galleries and collectors from all over the world, bringing more value to the lower end of the market.
Since the peak of the art market in 2007, the art market feels more vibrant than ever due to the large presence on social media platforms allowing for interconnectivity between galleries, fairs, artists, and collectors, the increase in online offerings, and new products such as NFTs creating much buzz in not only the art world, but beyond.
