UBS art advisory expert paints a positive picture of collectibles.
The art investment market could be heading into a renaissance as two key sections of the population add fresh brushstrokes, while old masters stay firmly on the wall.
Following a report that suggested both good and bad news for art investing, InvestmentNews asked Matthew Newton, art advisory specialist at UBS, to paint a picture of the current state of the market and the trends that are emerging for 2025.
Data suggests that the art market in 2024 saw fewer high-value transactions, while lower price points were more buoyant. But does this reflect a widening of the cohort of buyers or simply greater frugality of ardent collectors?
“On the auction side, yes, there have been fewer of the $10 million+ sales than there have been in the past, but you have to go a step deeper to truly understand the market forces at play here,” clarifies Newton. “What we’re seeing is a shift on the supply side rather than an increase in buyer frugality. Owners of high-value works are hesitant to list their pieces in the current market due to the perception that it is a buyer’s market. These collectors prefer to wait for a more favorable environment. That’s why you see that despite fewer high-end works being offered at auction, when those works do come up, there’s strong buyer appetite for them.”
But beyond the economic landscape, the market is also seeing greater influence from younger investors and women. Some of this impact is changing what pieces are in demand, but Newton cherishes the cyclical nature of the art market, while noting that newer investors’ tastes often align with previous generations.
“There certainly is a strain of young buyers who are interested in exploring digitally native art – we all saw that during the speculative boom that followed COVID with things like NFTs – but the prices of those pieces are way down,” he says. “However, many young buyers still prefer physical artworks, like paintings and sculptures, to enjoy in their homes. Inventing a truly new type of artwork is more than just creating a new technology, and so young buyers are going to be out there looking for the most interesting new voices, whichever medium they are using.”
Newton highlights that most people start getting serious about investing in art in the 50s and 60s, driven by a typical rise in nostalgia among those reaching retirement years. But this may not translate to classic artwork from the 19th century as investors seek to connect with artworks from contemporaries and the emerging talent that they have inspired
“I constantly encourage our clients and collectors who are focused on new artists to pay attention to the lineage of art history that has influenced those new voices,” explains Newton. “That’s how you create the narrative around artwork that is going to be understood and valued long term.
FEMALE INFLUENCE
These new voices include a greater focus on female artists, although heritage pieces created by women are also in demand because, as Newton points out, there’s an acknowledgement that you can’t tell the story of art without including a diversity of voices.
“So the art world in general is going back and looking at some wonderful artists who might have been undervalued when they were active compared to their male peers,” he says. “Joan Mitchell is one who comes to mind. She worked alongside some of the more famous New York abstract expressionist artists such as Jackson Pollack and Mark Rothko, but her works were dramatically undervalued by comparison. The market made a really major statement when two of her paintings from different points of her career each sold last year for just shy of $30 million.”
Female influence on the art market is also heightened by women’s growing control of wealth amid the intergenerational wealth transfer. These collectors may be keen to ensure that the story of female artists is told at last.
GETTING STARTED
For advisors with clients who are showing an interest in collecting art, the market can be bewildering when compared to traditional assets such as stocks and bonds.
“Art is highly illiquid and often involves substantial carrying costs like storage and insurance,” Newton says. “Additionally, art valuation is unique and subjective, while one share of stock in a company is, largely, the same as the other. If you’re approaching art as a very casual investor, you’re competing with people who live and breathe this and if you don’t have that same level of expertise (or work with advisors who do) it’s probably going to be hard for you to keep up with it.”
He adds that investors are probably best advised to buy art they like, as they may be the only ones that do!
This is perhaps most important for lesser-known, emerging artists. But with an eye on potential future financial returns, there are some things to consider.
“When you’re looking for an artist with great potential, you also consider things like gallery representation, museum interest, critical recognition, things that contribute to the broader mythology or narrative of the artist’s work,” he suggests. “These elements help build the artist’s profile and long-term value.”
