Tracing the art market trajectory

Dr Clare McAndrew, the brain behind the founder of Arts Economics, has authored 'The Global Art Market in 2010: Crisis & Recovery' report according to which China has replaced the UK as the second largest global art & antiques auction market. This significant loss of market share can directly be correlated to the highly impressive growth of the local Chinese art market that barely logged in any numbers worth reporting just about five years ago.

The first decade of the new millennium can be said to be a period of constant flux in the art marketplace. According to an estimate, it recorded a new peak in terms of business volumes and value in 2007. However, fortunes took a sudden twist. The next couple of years were filled with an atmosphere of panic and uncertainty marked by a steep decline in overall investor confidence and market value.

The wealth erosion strongly affected buying sentiment globally. After a period of eye-popping boom and subsequent bust, the astounding peak and the stupefying fall, the market started clawing its way back in late 2009, albeit with radically different contours of investing/ collecting, underpinned to a great extent by perceptible fundamental shifts in the mindset of major market players and also its hierarchy of power.

The art market found its feet and sprung back to life in mid 2010, to show its intrinsic strength. This spirit of resilience and recovery was largely driven by China, the US and India, to an extent. The process was hastened by strong spending power of Chinese and Indian art buyers. On the other hand, growth in Europe remained sluggish.

As a result, the distribution of wealth shifted eastwards evident in the number of HNIs (high net worth individuals) in Asia now almost equivalent to Europe, with a higher collective wealth. While the US and UK art markets were experiencing a period of gradual recovery, China continued to boom in 2010, establishing itself as the second largest market.