Art Market 2022 Predictions & 2021 Highlights

The Art & Auctions Market: A Look Back at 2021. A Look Ahead to 2022

In this Hookson blog, we’ll take a look at the highlights that defined the global art market across 2021. Then we’ll offer a range of art market 2022 predictions. Just what might the coming year bring to this creative, fascinating – and unstoppable – sector?

Extraordinary Circumstances Created Smart Solutions

The art, auction and collectibles market, like every other sector and industry on the planet, has been negotiating the changes imposed by Covid.

The pandemic has ushered-in smart digital solutions like virtual exhibitions and online auctions. And here at Hookson we’ve been supporting our art sector and auction house clients in riding out these extraordinary circumstances.

Across the last eighteen months or so their resilience and creativity has been impressive, with levels of service maintained as high as ever.

Familiarity and Escape

Perhaps it’s not so surprising. After all, in times of adversity, art – and the desire to get closer to it – grows in importance, supplying comfort and, in equal doses both familiarity and escape.

Whilst it’s true that the pandemic urged artists, auction houses and galleries to do things differently, it was never going to stop them doing things brilliantly.

The Art & Auction Markets 2021 – the Lowdown on the Highlights

As we’ve touched upon. with Covid came the necessity – and the opportunity – for the global art & auction markets to reappraise themselves.

The virus infected every major component of the business of buying and selling art. Established, unchallenged-for-decades ways of operating – particularly across in-person events like fairs and auctions – were forcibly pulled further into the digital world. Suddenly virtual exhibitions took precedence, as did online-first bidding and buying.

Alongside fundamental issues like employment and what to collect, issues of sustainability dovetailed with the shift to digital solutions. And, staying with digital, we must make mention of a curious new disruptor that really came of age in 2021: the Non Fungible Token (NFT).

Would the punky NFT be a peacocking flash-in-the-pan? Or a serious here-to-stay challenger?

2021 would provide an indication and – clue – would see even the most traditional auction house hammers confirming sales in the tens of millions.

A Work of Art: Employment Began Recovering

Covid hit the flesh-pressing, highly social art sector hard across 2020.

The damage manifested in several ways. Cancelled fairs and auctions. Furloughing and redundancies. Plus gallery closures and noticeable downsizing.

In response, digital solutions – virtual exhibitions, for example, and a more pronounced move to online bidding – kicked in.

But global hires recovered in 2021. Indeed, in Qs 1 & 2, the share of dealers recruiting trumped those which were losing staff – 25% against 13% according to the respected Mid-Year Review published by Art Basel.

A Shifting Landscape

The same report revealed just over half of dealers surveyed had some employees working remotely to one extent or another. And again, a little over 50% of these had introduced remote working in response to the pandemic.

These encouraging figures around employment look to indicate that remote and in-person methods of working will not only happily co-exist, but will actually enhance opportunity and experience.

HNW Collectors Mixed the Established with the New – and the Millennial Rose to Prominence

Amid those collectors with deeper pockets, it was millennials who outspent their more senior high net worth (HNW) peers.

Throughout the first half of 2021, average spend across HNW groups totalled $242,000. Interestingly, the millennial demographic outspent – by three times – older collectors.

Also of note was the spend recorded by female HNW collectors. This group averaged out at $420,000 – a rise of a third on 2020’s figures.

What you might call traditional art media – paintings, for example, and sculptures – caught the eye of 31% of collectors surveyed. That said, digital art accounted for 16% of HNW purchases.

Digital Watching

Let’s jump the gun and provide an aperitif to the predictions to follow. We reckon that the rise of millennial collectors will surely see digital art purchases zooming in 2022.

Stats back up this assertion: 48% of HNW collectors surveyed expressed interest in buying digital art in the next 12 months.

Diversity Increased – as Did Commitments to Equality

Alongside the rise in female HNW collectors’ spend, the works of women artists represented 42% of all art collections – a jump of 3% from 2020.

It was encouraging also that art institutions and galleries, inspired by the ongoing Black Lives Matter movement, expressed commitments to greater equality both within the wider art market and the working environment.

Related to topics of equality, further on in this blog we’ll discuss the issue of what we might label problematic art and legacy, and how the art and auction sectors might be tackling this in 2022.

Sold on Digital – Sales Showed Recovery and Online Gained Traction

Beginning to – cautiously – pick up in 2021 were art sales. The best news was reserved though for the bigger dealers. Those larger names surveyed by Art Basel reported an average uptick of 21%.

Smaller and mid-size outfits  – defined respectively via annual revenues of $250,000 and £500,000-$1 million – endured fewer sales when set against the opening half of 2020.

Perhaps unsurprisingly, online sales socked those made in-person. Share of sales at live events stood at just 7% versus 33% online – a figure that grew to 37% when including online viewing rooms.

Online Adopters

Of note also was the adoption of online sales by new buyers. This group accounted for 38% of all online sales by value. Added to this, existing clients, embracing digital channels for the very first time, completed another 25% of online sales.

NFTs – the Art and Collectibles Sector’s Oddball Outlier Made it Into the Mainstream

2021 saw the Non-Fungible Token becoming a thing that even non-industry websites, plus newspapers and mags, began reporting on.

It also saw NFTs receiving the anointment of the likes of Christie’s, Sotheby’s and Phillips. This was an action that pretty much signalled to the collectible world that ‘Yes, they’re odd. But, yes, they’re art’.

Our Hookson blog on the topic got in on the act. There we demystified the curious notion of indisputably owning a digital artwork that can simultaneously be shared and enjoyed by anyone who wishes to download and/or print it.

With buyers, according to nonfungible.com, outnumbering sellers, the NFT market massively ballooned in 2021. Sales had hit $3.5 billion by Q3, up from a lowly $13.7 million in the first half of 2020.

Several high-profile big-to-huge-ticket sales characterised the NFT arena in 2021. These included:

• The Boardwalk by Mad Dog Jones. Sold in February 2021 for $388, 888
• Death Dip by Xcopy. Sold  in March 2021 for $2,111,470
• Everydays: The First 5000 Days by Beeple. Sold in March 2021 for $69 million at Christie’s
• CryptoPunk #7252 by Larva Labs. Sold for $2.5 million in August 2021. Sold for $5.33 million a few weeks later

Like all great art, NFTs are causing quite the stir and instigating much debate around both artistic and monetary value. A discussion that’s sure to continue in 2022 and beyond.

Whatever your view, it’s a platform to keep an eye on:

Will well-heeled buyers have the last laugh, and will we laud them for spotting a new and authentic disruptor?

Or will we end up regarding NFTs as a swindle; an outrageous con-trick played upon those with more money than sense?

Either expect to receive one from your aunt next birthday, or listen out for the pop as the bubble bursts.

Now, With 2021’s Market Highlights Looked at, Let’s Turn our Attention to What Just Might be in Store for 2022.

Art Market 2022 Predictions: What’s Incoming for the Art, Auction & Collectibles Sector?

Digital Commerce: it’s Here to Stay

Innovations and digital commerce will become permanent fixtures rather than a reactive, temporary salve for a pandemic-struck sector.

Online art buying was of course already established in the pre-Covid market. But the creation of virtual viewing rooms and fairs, online-auctions-as-normal and the increasing application of virtual reality will sit astride traditional art and collectibles market fixtures.

Disruptive Digital

It’s great news. Disruptive digital has the potential to lower costs, especially for up-and-coming artists who struggle for wall space in conventional galleries, fairs and auctions.

Remote solutions will widen the collector base too; online galleries and events will bring art to buyers beyond those attending the flagship shows like Art Basel, Frieze London and La Biennale Paris.

Buyers: a New Collective

The application of digital innovations plays directly into another of our predictions around an expanding customer base: the emergence of a new breed of collectors.

It’s likely that disparate groups will account for these entrants. Sports and entertainment personalities will be one. Another will be on-the-rise professionals connected with the finance sector. One more will be younger-end entrepreneurs.

Lastly, and perhaps not surprisingly will be digital evangelists – the kind of characters who get in early on groundbreaking advances like cryptocurrency.

Expressing Personality

If these art-lovers sound like a broad church, it’s because they are. But uniting them is the wish to own art that expresses personality and values.

Further corralling them is a deep understanding and trust of digital innovation. Perhaps present also is the desire to sweep aside conventions like attending mega fairs and, of course, a keen eye for an investment opportunity.

Physical: it’ll be Back. But With a Whole New Wardrobe and Haircut

Despite gobsmacking innovations like virtual galleries and fairs, apps and sophisticated online bidding platforms, the in-person art show and auction experience will return. But it’s likely to be a more intimate offering.

We can see experiences ramped up by on-site digital components like VR-led stagings and immersive exhibitions, as demonstrated by the hugely popular Van Gogh Alive event.

Locations themselves will take on greater importance too. Covid-permitting, we predict massive venues largely dumped in favour of unique, value-adding spaces and a greater use of public arenas.

Problematic Pieces: Tough Calls on the Way for Exhibitors and Auctioneers?

It’s a sure thing that with a rising consciousness around the colonial origins of art and exhibits, that a process of ‘decolonising’ will touch the art world.

Openly challenged and even removed from display in recent memory were statues, like those of politician and imperialist Cecil Rhodes, and the slave-trading Bristolian Edward Colston.

Context, Contention and Controversy

So it’s certain that in 2022 those curating museums and auction sales will continue considering what is and is not appropriate to exhibit or sell.

Related to this, challenged also is the blunt banishing of problematic art itself.

Demonstrating this is the British Museum’s decision to re-home a statue of its founder, the slave-owning Hans Sloane (whose first and last names decorate addresses in Kensington and Chelsea). The work now stands in a new exhibit at the venue, one that contextualises Sloane’s prominence against the empire days he lived in.

It’s a tricky and contentious area, of course, and one way or another not everyone will be pleased with the museum’s response.

What’s certain though is that those exhibiting and selling art will be increasingly charged with making the call to remove pieces. Or re-contextualise them. Or, more controversially, to do nothing and allow them to provoke debate.

Watch This Space: More Difficult Decisions for the Greater Good?

Here’s another tough call set to rise in 2022. For hard-hit galleries, art institutions and collectors, the new year could see a rise in these organisations and individuals turning high art into hard cash.

Deaccessioning. What?

A well-known example of what’s known as deaccessioning occurred in 2020 when London’s Royal Opera House sold, for almost £13 million, its Portrait of Sir David Webster (1971), a work by David Hockney.

It’s an uncomfortable area, of course; no one really likes to see the selling of art in this way.

But it’s not always bad news for the public.

A More Diverse Offering

Look at San Francisco’s Museum of Modern Art. With the a-shade-over-$50 million garnered by its 2019 Sotheby’s sale of Mark Rothko’s Untitled (1960), the gallery purchased eleven new works.

That made good on the goal of the sale: to diversify the institution’s collection. Consequently, this gave less-well-known artists including Lygia Clark, Mickalene Thomas and Kay Sage terrific exposure.  And, of course, it expanded the museum’s visitor offering.

The Royal Opera House? It ploughed the Hockney wad into its recovery strategy, thus ultimately benefitting its patrons.

By way of a closing aria, the painting itself is actually on loan to the institution. It had been somewhat secretly purchased by Carphone Warehouse billionaire David Ross, himself a ROH board member at that time.

It’s all a bit messy, but the short version is: the work is still there, and on public display to those seeking interval choc-ices, Maltesers and Kia-Ora.

A Loan on What You Own – Higher Interest in Art Lending?

Finally, another intersection at which art meets cash is seen in art lending: securing cash loans against valuable works.

Spurred on by low interest rates and by appraisals that happen annually – far less frequently than comparable collateral – more art collectors may be looking at monetizing their artworks in the coming year.

Reasons for art lending are as varied as the collectors themselves. For some it might be about negotiating lifestyles compromised by Covid. For others it could be a smart way to deal with tax issues.

The good news for artists, auction houses and galleries though is that for many, a loan will be used to supplement collections.

Whatever the motivation, 2022 could be the year that new, previously cautious, entrants into this process emerge in greater numbers.

Art lending is something Hookson is actually intimately familiar with, due to our website design and online strategy work for valued client Edinburgh Asset Finance.

A Fascinating Year in Store

Thanks to Hookson’s relationship with our art and auction house clients, we’ve learned that this sector rarely stands still. So 2022 will be another fascinating year for those creating, buying and selling art and collectibles.

Will our art market 2022 predictions come to pass? We reckon so. What’s certain though is that we’ll be watching a continued recovery, supporting our clients, and being thrilled all over again by the sector’s imagination, creativity and innovation.