According to a new Bank of America art market analysis, reduced auction estimates, gallery reductions, and recent interest rate cuts has increased collector participation in prominent events such as the New York fall auctions and Art Basel Miami.
The projected favourable buying circumstances follow lower-than-expected art sales in the secondary market during the first half of the year, with auction prices rising only 1% over their aggregated mid-estimates, the smallest increase in more than seven years.
The present market slump, which began in 2023 with worldwide geopolitical upheaval, rising inflation, and interest rates that impacted collectors, has extended into 2024. Less headline estate property in the May sales may have diminished buyers’ optimism and enthusiasm. Fewer masterpiece pieces are available in what is commonly regarded as a “buyer’s market.”
While some auction prices are falling and bidder rivalry is reducing in some parts of the market, the analysis shows that collector interest in certain collecting categories, such as the Latin American (LATAM) and Latin diaspora artists market, is anticipated to continue till 2025.
Sales in this industry have increased 18% year on year and show no signs of decreasing, based on current market action and institutional support.
According to the report’s results, art is becoming more and more seen by collectors as an asset that fits into their overall wealth management plan.
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Art and collectibles are predicted to be worth over $2.8trn by 2026 and account for over 11% of ultra-high net worth individuals’ portfolios. As younger generations accumulate and inherit wealth over the ensuing years, interest is only anticipated to climb.
In addition to this, galleries must decide whether to adjust to the new market conditions or run risk of building up unsold inventory.
Drew Watson, head of art services at Bank of America Private Bank stated: ‘Collectors are more discerning than ever. They know that galleries continue to sell A+ works, but that terms are more negotiable on everything else. Collectors are using that knowledge to secure more favourable transaction terms: including skipping waitlists, eliminating resale restrictions and ‘buy one gift one,’ and of course, price discounts.’
He continued: ‘Latin American artists have seen strong buyer interest and sell-through rates so far this year. We saw multiple record-breaking auction sales in the spring, and biennales and art fairs have become key primary market platforms.’
