Why invest in art now?
There is a massive demand-supply imbalance, with a growing wave of capital chasing an ever scarce pool of assets.
Demand Growth: Secular growth in purchasing power among the global ultra-high-net-worth community. 6.1% CAGR in the number of dollar millionaires from 2019-2024(1).
Supply Scarcity: Decreasing available supply as the artwork is acquired by museums and permanent collections. In 2020, only 15% share art purchases by museums and arts Institutions(2).
2020 demonstrated the art market’s resiliency.
Despite a global pandemic and significant volatility across asset classes, the art market generated strong financial returns in 2020.
Strong performance: Post-War and Contemporary art market rendered a 15.1% return(3).
Online sales boom: artworks saw a 511% increase in Total Sales via online marketplaces(4).
Contemporary art market expands: Post-War and Contemporary Art continued to gain market share, reaching an all-time high of 55%(5).
2021 art market continued the price momentum.
With the wealth of billionaires at a record level and an increase in the number of young collectors, the art market looks very promising.
Ultra-High-Net Worth Growing: Both the number and wealth of billionaires reached all-time highs in 2020. It saw a 32% growth in the wealth of billionaires(6).
Young Collectors Enter Market: With art auctions taking place online, buyers under 40 accounted for 25% of bidders (compared to 15% in live auctions). This resulted in 122% growth in young collectors buying online(7).
2022 art market outlook
The past two years have been especially tumultuous for the world of investment, with nearly every market impacted by the effects of the pandemic. However, the art world has shown remarkable resilience. In fact, in the first six months of 2021, the average spending on art and antiques among high net-worth individuals reached $242,000 – an increase of 42% from the previous year(8).
With figures showing that art market activity is already returning to pre-pandemic levels, we believe 2022 will be an appealing and exciting year to invest in art.
" The US art market has spearheaded the recovery, with more than half (51%) of Sotheby’s, Christie’s and Phillips auction sales generated through New York in 2021, up from 43% in 2020.” That is driven by “pent-up demand, asset diversification and a generational shift in the art market” plus the US generational art wealth transfer, all factors that will only continue in 2022."
-Anders Petterson, ArtTactic
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