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Trade Trends News
03-11-2023
· UBS and Art Basel report that Hong Kong leads the import and export market in the first three months of 2023 compared to the same period last year.
· Art Basel CEO Noah Horowitz is optimistic about the year ahead as "more than half of all collectors plan to buy art."
Hong Kong's art exports rose nearly 60 percent year-on-year in the first quarter, buoyed by the "vibrancy" of Art Basel's global fair in Hong Kong in March, according to the Art Basel 2023 and UBS Art Market Report, a joint study by Swiss investment bank UBS and the Hong Kong Arts Centre.
The study, released Thursday, showed that global art auction sales in the first half of the year were down 16 percent compared with the same period in 2022. But most high-net-worth collectors said they intend to buy more art next year as they are more optimistic about the art market than stock investments. Noah Horowitz, chief executive of Art Basel, said the signs are promising.
"Looking ahead to the second half of the year and 2024, more than half of collectors plan to buy art," he wrote in the report.
The annual study also shows how the art market retains strength - valued at $67.8 billion in 2022 - despite geopolitical conflicts, high interest rates and a challenging macroeconomic outlook.
Hong Kong is one of The Highlights
This March's Art Basel was the first since the full reopening of Hong Kong's borders with the Mainland and the easing of key travel restrictions related to the epidemic.
The city saw the highest increase in imports and exports of art and antiques in the global market in the first three months of the year compared to the same period in 2022.
Exports were up 59 percent, ahead of other major markets such as the U.S. and the U.K., which the report said were "up only modestly year-over-year." Hong Kong's imports of art and antiques also rose by 50%.
The figures run counter to the trend in Hong Kong's overall merchandise exports, which have fallen for 17 consecutive months through September due to weak global demand.
Prof. Chong Tai-liang, executive director of the Institute of Global Economics and Finance at the Chinese University of Hong Kong, said the strong industrial figures were not representative of Hong Kong's macroeconomic conditions.
"The discrepancy also has to do with the fact that each artifact is unique, such as apples, which are very similar from year to year ...... That's why we can't look at trade in the same way from an economic perspective," he said.
The report said art trading was sluggish in the first half of 2023, with total sales at global auction houses such as Christie's, Sotheby's, Firmenich and Bonhams contracting by 16% from the record 2022 period. However, the performance was still better than pre-epidemic H1 2019 figures.
Median spending by high net worth collectors surveyed in the first half of the year was US$65,000, unchanged from 2022 but up 19% on 2021. Mainland collectors spent US$241,000 during the six-month period, almost four times the median.
HNWIs are defined as those with a current net worth (excluding real estate and private business assets) of more than US$1 million.
Most of these collectors favor paintings, followed by works on paper. Digital art remains unpopular.
Nevertheless, more than half of the HNW collectors said they plan to return to the auction market next year, with collectors from the continent being the most active, followed by those from Japan, Brazil and Italy.
Phillips de Pury & Company's Head of Evening Auctions and Associate Director, Wendy Su, predicts that 2024 will be a buyer's market.
"The art market has remained quite resilient during the New Crown epidemic when other sectors were struggling," she said. "There are a number of reasons for the weakness of the art market, including the macroeconomic situation. It is also related to lack of supply and weak demand."
Armed conflict and climate change have also prompted collectors to take a more cautious approach, she said.
"After the epidemic, auctions openly recognized that the art market was about to restart," she said. "I think the art market has become more rational."
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