Here’s a sentiment you probably haven’t heard in awhile: “2017 may actually be a very stable, nice year.”
That’s the conclusion drawn by Doug Woodham, former Christie’s president of the Americas, from this year’s ArtTactic Global Art Market Outlook, released this week. Amidst the current political turmoil and economic uncertainty, he said, the art market could be an island of stability.
Of course, art market players aren’t oblivious to the current state of affairs; political and economic uncertainty ranked highest on 2017’s list of risks to the art market. And while stock markets have been rising despite the unexpected results of the Brexit referendum and the U.S. election, “there’s also a deeply emotional aspect” to art buying, said Anders Petterson, founder and managing director of ArtTactic, noting that the global art-collecting elite could be feeling shaken by geopolitical events.
Still, the overall tone, which surveyed 182 art-world participants, including collectors, advisors, dealers, and auction house professionals, was what you might call “cautiously optimistic.” Here are five key takeaways from the report.
Things are looking up
The survey found a positive outlook across all 10 regional markets it surveyed, with the most positive sentiment emanating from Africa, South Asia, the U.S., and Latin America. Overall, 59% of those surveyed described the global outlook for 2017 as positive, and only 8% as negative. That’s a substantial 18-percentage-point increase in optimistic sentiment from January 2016, but a marginally less rosy outlook than two years prior, when 66% of those surveyed were optimistic about the prospects for what turned out to be a disappointing year.
Many factors are in place to further induce the “wealth effect” that can bolster art buying
, especially in the U.S., the largest art market by value. Those include rising equity markets, as well as rising home prices and low unemployment. The International Monetary Fund recently increased
its forecasted GDP growth in the U.S. to 2.3% in 2017 and 2.5% in 2018. And an improving macroeconomic environment could give collectors additional psychological impetus to buy.
“Art is entirely a discretionary purchase,” said Woodham. “People need to feel comfortable with their wealth position to buy art.” Furthermore, the current low-interest rate environment makes a non-interest-bearing asset like art more attractive to own, although he warns that could shift if interest rates move up significantly, something the U.S. Federal Reserve has indicated is on the horizon.
One last reason for the optimism? It can’t possibly get any worse than 2016. Last year “was quite a difficult, challenging year for the art market,” said Petterson, and many art market players feel “the market has bottomed out.”