A Global Decline Detected According to the TEFAF Art Market Report

March 10, 2016

Global art market broke all known records in 2014 as it reached its highest ever recorded level of sales value of $68.2bn. But the year of 2015 has seen things move in the opposite direction and slight crisis is noticeable in the market sales. According to the annual TEFAF Art Market Report, 2015 was the year of global decline as the sales fell 7% in value (to $63.8bn) which was caused mainly by the crash in the Chinese art market. However, certain parts of the market are still growing strong which suggests that the current downturn could be only a passing trend.

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Clare McAndrew the creator of TEFAF Art Market Report

US Leads the Global Market, China Down to Third Place

It seems that the global trend hadn't affected the art enthusiast in the US. Despite the worldwide decline, art market in the US is still alive and well and recorded a 4% increase in sale, making 2015 the best year ever. The US powerfully confirmed its leading position in the market with almost half of the global sales value recorded in the country. The unfavorable state of the Chinese economy has caused a 23% decrease in the art sales value and pushed the Asian country to the third place thus enabling the UK to take back the second position in the art sales rankings for the first time since 2012. The result is slightly surprising considering that the European art market is going trough a rough period with poor, inconsistent sales throughout the year. The UK is no exception in this regard and it suffered a 9% drop value as well. However, it's not all bad news for China. The country with an astonishing porcelain tradition has seen the rise of sales in the sector of decorative art and antiques. The 6% increase was caused by the high prices of porcelain and ceramics whose value reached a $2.2bn in value last year.

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Christie's and Sotheby's

Auction Houses and Art Fairs Suffer but Online Platforms are on The Rise

It's been hard for the auction houses as well. After two years of considerable growth auction businesses suffered a decline in both sales value (by 14%) and a number of transactions (20%). Also, they are no longer a dominant force on the market as less than half of the sales are made at the auctions. The majority of works in 2015 (53%) were sold by private dealers and other agents. Art fairs have also recorded a sales decline resulting in numerous cancelations this year but the online trade sector represents the bright spot on the market. This sector has a constant year-to-year 7% growth and last year it reached the 7% share of the global market, which is an excellent result for relatively new sales platform.

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Modigliani's Reclining Nude was Sold for Over $170 Million, photo via CNN

Despite the Decline, Picasso and Modigliani Reach Record Prices

The most popular artworks on the art market of came from two segments - Post-War art (that makes up for 46% of the market's value) and Contemporary and Modern art (with a 30% share). According to the TEFAF report, these works sell consistently and reach the highest prices but still suffered an almost 20% decline. A closer look at the report reveals that selling works by emerging artists wasn't easy because collectors focused mainly on pieces made by the narrow group of famous artists. Works by Pablo Picasso and Modigliani for instance, both reached sky-high prices that exceeded $170 million a piece. In fact, more than half of the sales value originated from the most expensive group of artworks, those that are sold for more than $1m dollars a piece. The most expensive artworks were the easiest to sell last year and the ultra-high end sales (that included works priced at $10 million and more) reach and astonishing 1,000% growth compared to the 2014 sales.

The recent decline in sales was caused mainly by the decrease in China which once again proves the significant importance of this part of the world for the global art market while the general 3% decline of millionaires in the world is also named as one of the reasons for the drop. However, Clare McAndrew from TEFAF said that the final result is not as unfavorable as it may appear. TEFAF report states that the decline was inevitable considering  the constant art market expansion that we've seen in the last 10 years. "The main reason for the negative growth is that the bigger the market gets, the harder it is to keep growing at as fast a pace.” Clare McAndrew stated and added that although it's "too soon to say what will happen next year" she doesn't predict any further downturn in the global market sales.

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Editors’ Tip: Cosmopolitan Canvases: The Globalization of Markets for Contemporary Art

For further reading on the global art market, we recommend this extensive publication edited by Olav Velthuis and Stefano Baia Curioni. The phenomenon of globalization, that's been present since the late 1990s, has attributed to the complexity, interconnectedness and stratification of Contemporary art markets. By focusing on various regions, including China, Russia, India and Japan, and on different institutions and organizations, the book represents a much-needed, multidisciplinary, cutting-edge research. The book focuses on the changes brought to the art market by the new, growing economies, but also deals with the future of the dominant role of Europe and the US.

Featured image : Art Fair Photo ; All images used for illustrative purposes only