Hong Kong art exports jumped nearly 60 per cent in the first quarter compared with a year ago, buoyed by the “vibrancy” of Art Basel taking place in the city in March, according to a joint report by Swiss-based investment bank UBS and the global fair.
The study, released on Thursday, showed sales at art auctions around the world in the first half of the year declined 16 per cent compared with the same period in 2022. But most high-net-worth collectors said they intended to buy more next year as they were more optimistic about the market than stock investments, with Art Basel CEO Noah Horowitz suggesting the signs were promising.
“Looking ahead to the second half of the year and into 2024, over half of the collectors are planning to purchase art,” he wrote in the report.
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The Art Basel & UBS Art Market Report 2023 polled 2,828 individuals across 11 markets including Hong Kong, mainland China, the United Kingdom and the United States.
The annual study also showed the strength of the art market – valued at US$67.8 billion in 2022 – despite geopolitical conflicts, high interest rates and a challenging macroeconomic outlook.
Hong Kong was one of the bright spots. This year’s Art Basel in March was the city’s first since the full reopening of the border with the mainland and the relaxation of major pandemic-related travel restrictions.
The city recorded the highest percentage increases across global markets for imports and exports of art and antiques in the first three months of the year compared with the same period in 2022.
The value of exports jumped by 59 per cent, leading other major markets such as the US and the UK, which the report said “only grew marginally year-on-year”. Hong Kong’s art and antiques imports also grew by 50 per cent.
The figures buck the trend of Hong Kong’s overall merchandise exports, which had declined for 17 consecutive months as of September on the back of weak global demand.
Professor Terence Chong Tai-leung, executive director of Chinese University’s Institute of Global Economics and Finance, said the strong industry numbers were not indicative of the city’s macroeconomic situation.
“The differences also relate to every art piece being unique, unlike apples for example, which are very similar every year ... That is why we can’t look at the trade in the same way from an economic point of view,” he said.
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The report said the first half of 2023 was subdued for the art trade as the combined sales of global auction houses of Christie’s, Sotheby’s, Phillips and Bonhams contracted 16 per cent over the same period in 2022, which was a record year. But the performance was still better than the first half figures for 2019, before the pandemic.
Median expenditure of high-net-worth collectors polled stood at US$65,000 in the first half of this year, the same as in 2022 but up 19 per cent over 2021. During the six-month period, mainland collectors’ spending reached US$241,000, almost four times higher than the median.
High-net-worth individuals were defined as people who had a current net worth, excluding real estate and private business assets, of more than US$1 million.
Most of these collectors favoured paintings, followed by works on paper. Digital art remained unpopular.
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Still, more than half of the high-net-worth collectors said they planned to return to the auction market next year, with those from the mainland being the most active, followed by those in Japan, Brazil and Italy.
Danielle So Yuen-ting, head of evening sale and associate director of auction house Phillips, expects 2024 to be a buyer’s market.
“During Covid, when other sectors were troubled, the art market stayed pretty resilient,” she said. “There are a multitude of reasons for a weakening art market, which includes the macroeconomic situation. It is also to do with a lack of supply and a weakening of demand.”
She said armed conflict and climate change also contributed to the more prudent approach by collectors.
“After the pandemic, auctions have publicly acknowledged that the art market is coming to a reset,” she said. “I think the art market has become a lot more rational.”
