Despite Cold Wave in the Korean Art Market, K-Art May Make Strides This Year

The volume of transactions in the Korean art market is estimated to have decreased by 17 percent year-on-year in 2023 due to the economic downturn, high interest rates, and falling asset prices. However, there are also hopeful signs that a rebound may come in the future. Young collectors are constantly coming in, and signs of global galleries entering Korea and spreading K-Art are also emerging. Thanks to these factors, the Korean art market has solidified its foundation through a period of adjustment, raising the possibility of a rebound.

The Ministry of Culture, Sports and Tourism and Korea Arts Management Service (KAMS) estimated that last year’s art market transaction volume was about USD 501.6 million, down 17.0% from the previous year. The survey was conducted from late November to early December of 2023 by galleries, art fairs, auction houses, and art museums.

The Korean art market, which was estimated to have surpassed $750 million for the first time in 2022, shrank significantly over the past year. However, some pointed out that last year’s survey was conducted by simply adding up the sales of art fairs and galleries. This time, the survey excluded the sales of galleries participating in art fairs.

The number of artworks traded last year was 51,590, down 15.1 percent from the previous year. Among the major channels for trading, the slump of auction houses was particularly noticeable. Auction houses sold about $113 million, down 36.1 percent year-on-year, and the number of artworks sold (estimated at 16,508 pieces) also fell 18.1 percent. Auction sales of items worth more than $7.50 million fell 47.5 percent, but sales of items worth between $750,000 and $3.76 million rose 38.1 percent, showing contradictory results.

“The Korean auction market has seen a significant decline,” said the Paradise Culture Foundation’s related report titled “KOREA ART MARKET 2023,” which surveyed and analyzed the current status of the Korean art market. The total successful sales amount in the first half of 2023 was about $60 million, down 44.8% from the same period last year. In particular, the report noted that the successful bid rate, which was about 65% from 2019 to 2022, fell to 52% last year.

Among galleries, transaction volume totaled approximately $320 million, and the number of works sold reached 24,541 pieces, down 5.6% and 9.2%, respectively. The sum of works traded at art fairs decreased by 5.5% to about $220 million (including gallery sales), and the number of works sold decreased by 10.5%. Excluding gallery sales, the amount traded at art fairs was about $3 million; results from the 2023 Frieze Seoul events were not included in this survey. The purchase amount of works at art museums was about $14.5 million and the number of works was 1,304, down 32.2% and 53.6%, respectively.

While the reduction in the art trade is clear, interest in the art market has not decreased. The number of visitors to art fairs seems to be on the rise. It was estimated that Frieze Seoul attracted more than 80,000 visitors last year, an increase of about 15 percent from the previous year. In particular, young people are invigorating the art market. With the increasing number of young collectors, large galleries are expanding their businesses, and foreign galleries and auction houses are entering Korea one after another. This trend is a catalyst that strengthens the foundation of the art market. Some statistics show that the amount of credit card purchases made by collectors in their 20s through 40s in Kiaf Seoul increased by 62 percent last year from the previous year.

As a result, the status of Korean art in the international art world is increasing. The “KOREA ART MARKET 2023” report cited active international activities of Korean art experts such as the rapid increase of the number of Korean artists active in the international art world and the increase of public interest and high-quality exhibitions.

“Last year, the Korean art market was full of dynamic energy,” said Choi Yoon-jung, chairman of the Paradise Culture Foundation. “Korean art was also the central topic among international art fairs and art sponsors.”

Meanwhile, the Korean art market is not expected to be much different this year from last year. Overall economic conditions and interest rates may not be significant. According to a survey of domestic galleries, auction houses, art fairs, art museums, and exhibition spaces, 47.8 percent predicted that the outlook for the art market will be similar to that of last year, and approximately 26 percent said they would suffer from a slight recession. In addition, the decline in the number of auction entries and the successful bid rate is seen as a challenge currently facing the Korean auction market.

The number of visitors to this year’s art exhibitions is expected to remain similar to last year’s, with 45.9 percent of respondents forecasting a slight increase of 31.5 percent. It is interpreted that interest in art will continue.

Major issues to watch in the Korean art market in 2024 include the hosting of Frieze Seoul and Kiaf, the change in art purchase trends due to the emergence of new consumers, and the rise of young galleries and art fairs.