Art market maintains stability amidst economic uncertainty.
At a time when consumer confidence is at an all-time low, many are not only inevitably cutting back but sourcing new revenue streams to bridge the financial gap and hedge against the crippling rise of inflation. Economists have warned that the UK faces the worst drop in living standards since the 1970s, with many criticising the Government’s industrial strategy including former business secretaries and industry groups. Critics have suggested that the industry is not being set up to compete internationally - the risk/reward ratio is better in many other countries leading to a worrying trend in unregulated finance in the UK.
Still reeling from the Brexit fallout, the country also eagerly awaits further progress in trade deals which would support growth. We may have closely swerved the recession we were promised however despite the price of gas returning to a more comfortable level, long-term contracts mean that this saving will take time to reach those who need it with prices remaining elevated for the rest of the year.
Despite economic volatility “London has huge appeal internationally” according to Lucie Kitchener, Chief Executive of the art and luxuries fair Masterpiece. Hailed as ‘an entrepôt’ by Anthony Browne, chairman of the British Art Market Federation, leading figures in the art world are revelling as sales across all major auction houses pick up again after constraints imposed during the pandemic.
Being a non-correlating asset, not affected by market fluctuations in the economy at large, art is one of the few places wealth can still be stored without depreciation, unlike banks for example. Because of this investors are more interested than ever in tangible assets, keen to protect their funds in any way possible. As a result of the pandemic, a loss of just over $4 billion in sales during 2020 when restrictions were imposed shows an understandable dip during a time when people physically could not buy art. The art world quickly responded however, creating new platforms upon which buyers could easily view and purchase art. The market not only recovered immediately but grew as well and shows no signs of stopping thanks in part to the desperate economic outlook. Worldwide art and antiques sales increased 3% year-on-year to an estimated $67.8 billion (£54.8 billion) in 2022.
Last week at Sotheby’s, the Contemporary evening sale generated a cool $145.8 million in one evening alone. As the art world continues to grow, so does the amount of art available to buyers at all price points. It may seem obvious but buying low in order to allow art to appreciate is an investors dream and one of the reasons why Red-Chip art is having a moment in the wake of the pandemic, political unrest, and the long wait for various trade deals.
Our flagship gallery is now open - should you wish to make a potential investment please make an appointment with one of our Art Advisors by emailing info@henarchgalleries.com and we can discuss your options in person.
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