July 26, 2023

Art Market Outlook 2021

That which does not kill us, makes us stronger. This eloquent aphorism has never felt more accurate than over the past year.

Art Market Outlook 2021

That which does not kill us, makes us stronger. This eloquent aphorism has never felt more accurate than over the past year, which we might forever condemn as one of the worst in the post-war history, writes Agata Becker, founder Agart. If anyone had told you five years ago that you were going to experience first-hand the scenarios taken straight from the movie Contagion, you would have doomed such a preposterous suggestion abstract as: irrational, illogical and wholly absurd.

The beautiful and elegant (let’s call it) pre-2020 Old Order – of the art market – that once resembled a work of an Old Master has rapidly undergone a major recalibration and rebirth into the New Order largely distanced from its precursor. The disruptions caused by the pandemic are aplenty and both the art market and its investors felt the turbulence. But we are beginning to see the light at the end of the tunnel.  The anxiously awaited news of the vaccine provides a beacon of hope. However, we are still well within the phase of uncertainty resembling that of navigating a vessel in foggy weather.


The hyper accelerated move to online-only auctions has proven to be effectively and efficiently executed. ArtTactic reports global combined sales of $1.03bn in 2020, up by $168.2m in 2019 for the three powerhouses: Sotheby’s, Christie’s and Phillips.

Auction houses certainly delivered on innovation and adaptation. Sotheby’s reports it was able to tap into new bidders and buyers base who accounted for 30% of the total online sales. These would not would have been inclined to attend the real-time auctions pre-pandemic, which shows buyers are clearly confident with art e-commerce.

The question remains though, exactly how the supply will be affected and what consignors will bring to the table whilst they free themselves of initial jitters around the reduced demand. The 10 most expensive pieces sold at auction during 2020 all sold under $100m each with the highest price, $84.6m, fetched for Francis Bacon’s Triptych inspired by the Oresteia of Aeschylus (1981) in the Sotheby’s auction live streamed from HK, London and New York. Query whether adding the real-life auction room frenzy and a bit of champagne induced excitement would have added more digits to this price. Investors and divestors will probably take interest in the fact that several lots have been guaranteed or backed by third-party irrevocable bidders.

Given both sellers and buyers chartered new territories throughout 2020 and they all had to switch their habits and thinking to the click, not brick reality, the first year offers positive sentiments.


Doubtless, art dealerships have taken the hardest hit so far. The mega galleries such as Zwirner or Hauser & Wirth continue to exist as such, but many smaller players went out of business or struggled considerably. However, if virtual viewing rooms remain prevalent, they could face lower running costs compared with running booths at physical fairs.

As the past year has shown, survival instincts led to creative collaborations between what we would otherwise consider competitors. Unusual synergies between auction houses and galleries have formed leading to symbiotic business relationships between them and allowing the latter to continue trading.

One such example is the Sotheby’s Gallery Network, where red chip art galleries piggy back on the auction house’s platform for a commission from any sales. Others include Platform launched by Zwirner. Interestingly, this isn’t a completely new concept, as back in 2017 Talking Galleries Initiative were theorising about galleries and auction houses joining forces in “new models of collaboration”.

We are likely to continue to see this inevitable departure from traditional ways of running art sales businesses, to a more forward-thinking and strategic partnership spirit ignoring the competition aspect for the moment. For investors this could potentially mean more room for negotiation of terms and price, which also aligns with increased need for liquidity by consignors.


For buyers and sellers alike, in-person art fairs provide not only the best opportunity for both sides to strike a deal but also to experience the art for what it is – a sensory stimulus that is best experienced live. This personal experience of art has been ripped out of our hands by the pandemic and it remains questionable whether fairs will ever come back to their old glory days.

For now, it appears we can remain somewhat hopeful as both Frieze New York and Frieze London are still due to go ahead later this year (in May and October respectively). Art Basel Hong Kong, Basel and Miami are scheduled to run in May, September and December respectively. For the old master circle, The European Fine Art Fair (TEFAF) is going ahead in early May in New York by invitation only and in Maastricht at the end of May.

It is fair to assume this schedule is still subject to change depending on the regional and global developments closer to the time. Probably it is also too early to make any ambitious predictions whether the rooms will be filled to brim and whether it will be larvatus prodeo (masked) for everyone because the outbreak situation is still barely under control. But at least buyers and sellers will have a chance to reconnect in the traditional manner and have a chance to admire the art for what it is – an aesthetic pleasure, or pain, best experienced by sight.


The accelerated shift to online art trade has been visible across the board over the past year. Insiders suggest that it will aid the market with increased price transparency. As far as the long-term effects go, we are yet to see.

Potential benefits for the buyers could include increased protections, as online buying denies the buyer the same level of due diligence on a particular piece compared with buying it sight seen. Potential pitfalls on the other hand might evolve around the jurisdiction of transaction, governing law of the deal and the quality or the depth of the due diligence process.

It is therefore highly recommended that collectors/investors remain savvy and seek legal advice prior to concluding a deal, in particular in the context of blue and red chip pieces where a lot is stake and a lot can go wrong. Prevention is always better than cure. Documenting any given transaction appropriately certainly serves as a prudent risk mitigating tool.


The UK Supreme Court has recently handed down a decision regarding business interruption (BI) policies. It has been decided that the Covid-19 pandemic should be construed as to trigger such policies and therefore in some cases, pay-outs.

For any art dealership with such a product in place, it is therefore essential to do the homework and have the policy wording carefully checked because there is a possibility they might be entitled to a pay-out. It is not a slam dunk scenario. However, even if the policy is triggered, which all depends on the language around ‘on-premises’ and ‘within a certain radius’, insurers will typically attempt to interpret such provisions against the policyholder.

Another obstacle to financial compensation is proving the level of loss suffered by the art business.  Insurers are likely to be extremely strict in scrutinising the numbers produced by the affected company’s bookkeepers. Art businesses are therefore advised not only to engage professionals such as lawyers but to also seek independent accounting advice to ensure any claims they might bring forward under a BI policy are watertight.

All in all, we are still within a period of transition, but it is evident the art world has already changed. In particular if we pause and consider answering the questions: ‘Who buys art?’, ‘What are they buying?’ and ‘How are they buying?’. As mentioned above, new or adapted business models to facilitate art transactions are already present but likely will evolve even further. The buyer universe is also expanding to make the art market more egalitarian.

With that in mind, and if we are to ignore for a minute everything else that is happening, it will be an exciting year in the art calendar.

*Featured in Private Art Investor