Art Basel Miami Beach saw strong sales and attendance last week, as the art market rode a wave of renewed confidence following strong November auctions in New York.
More than 80,000 collectors and art enthusiasts flocked to the Miami Convention Center for the annual art show, with several works selling for more than $1 million. Collectors from the United States, Europe, Latin America, the Middle East and Africa visited more than 280 galleries at the show, as well as several art fairs and pop-up exhibitions throughout Miami.
After nearly three years of falling auction sales and closing galleries, dealers and advisers say the market has suddenly come back to life. Auctions in New York last month topped $2 billion, including a record-breaking Gustav Klimt that sold for $236.4 million.
“There has been a decisive shift in the market,” Noah Horowitz, CEO of Art Basel, told CNBC. “We’re not quite out of the woods yet, but there’s buying, there’s activity, there’s energy and there’s dynamism. We saw that very, very clearly when the show opened.”
Just as there was little consensus on the cause of the art market’s decline, there are vague and conflicting theories about the rebound. Some say the prospect of lower interest rates is boosting demand. Others say geopolitical tensions have eased as the balance sheets of the rich have expanded rapidly.
“There is a lot of wealth in the world right now,” Horowitz said. “We’ve lived in a high interest rate environment. There’s geopolitical complexity, there’s pricing complexity, but I think on some level people are done with that. They want to go out and be with each other and gather around art. Art brings people together and buying art makes people happy.”
Art Basel also attracts large amounts of wealth. Private banks, wealth management firms, luxury brands, high-end real estate brokers and various other members of the white glove brigade have descended on Miami Beach to get cozy with their clients. It was UBS which was the most present as the main global partner of Art Basel. Its VIP lounge located upstairs at the fair (the only one of its kind upstairs) was once again the hottest venue in town, hosting a constant stream of dozens of billionaires, major collectors and wealthy families.
“You have an almost extreme concentration of wealth in this one room,” said Matthew Newton, head of Art Advisory Americas in Family Office Solutions at UBS. “Some of the most important collectors in the world come together here and, in some cases, almost compete for our works. It’s a really important moment.”
Alongside seasoned collectors, UBS also helps wealthy clients new to art learn the basics and become more comfortable buying and selling.
“We have a lot of successful entrepreneurs who are selling businesses, building one or more dream homes, and they are willing to put real art into it,” Newton said. “One of the big pieces of advice is that you need to see as much art as you can. Go out there, see as much as you can and don’t wait too long to get into it. Go ahead and buy something. It helps to have a little skin in the game, and it’s okay to make mistakes early on.”
Newton also advises fair patrons to view art as an asset rather than an investment.
“Most high-net-worth collectors view art as a collection, not necessarily an investment,” he said. “They want to be smart about buying. They don’t want to overpay. But that’s really not their primary concern. They think of it more as something that has a lot of meaning to them. Frankly, these are the collectors who are most successful in the long term, also in a financial sense.”