State of the Market: Key Trends in 2021’s Fourth Quarter

Liz Catalano
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Another year of art sales is finished. For many, 2021 brought an imperfect mix of anticipation and fear as the art world regained a sense of normalcy. Art fairs continued to offer a mixed approach to in-person events during 2021’s fourth quarter. In the auction sector, sellers organized some of the most significant events of the year all while scrambling to accommodate rapidly changing consumer tastes. Auction Daily checks in on the state of the market as 2021 draws to a close.

Sotheby’s New York headquarters. Image courtesy of Sotheby’s.
Sotheby’s New York headquarters. Image courtesy of Sotheby’s.

Auction Houses Announce Yearly Totals

Preliminary auction results from the market’s key players are starting to trickle in. Sotheby’s brought in a record USD 7.3 billion in sales this year. This figure outpaces totals from 2020 and even pre-pandemic levels. Modern and contemporary art boosted the results, as well as luxury goods. Major consignments such as the Macklowe Collection catered to high-spending collectors. Many had money to invest after the market experienced a dry spell of rare works by major blue-chip artists. Shortly after Sotheby’s announced its yearly results, owner Patrick Drahi indicated that he may bring the company public again. 

Christie’s ranked second in total auction sales when it announced its results in 2021’s fourth quarter. It made $7.1 billion. Much like Sotheby’s, the auction house made more this year than it did before the pandemic. Single-owner collections from Edwin Cox and others helped buoy the total. For its part, Phillips reported $1.2 billion in sales during 2021. This is a new high for the British house.

While these results reflect the top of the market, mid-level auction houses also experienced a relatively strong year. After 2020 caught the market by surprise, 2021 gave companies a chance to test new technologies, categories, and stunts. Online auctions continued to dominate despite a cautious return to in-person events. However, the new Omicron coronavirus variant added a note of bitterness and uncertainty as the new year approached. A fully revitalized art market continues to be a moving target.

Christie’s auctioneer Elaine Kwok with a major Yayoi Kusama painting in Hong Kong. Image courtesy of Christie’s.
Christie’s auctioneer Elaine Kwok with a major Yayoi Kusama painting in Hong Kong. Image courtesy of Christie’s.

Asian Art Markets Continue to Expand

Asian buyers significantly boosted auction revenues in 2021. Young collectors in Hong Kong and beyond started to establish an international presence this year. In 2021’s fourth quarter, a slew of reports pointed out the swelling size of the Chinese art market, as well as the Asian market at large. The Greater China region (which roughly includes the borders of mainland China, Hong Kong, Macau, and Taiwan) accounted for 36% of global art sales in 2020, according to the most recent China Art & Wealth White Paper. China now outpaces both the American and British markets. Western fine art offerings have propelled this expansion, and young tastemakers are remaking the global art world almost singlehandedly. 

Auction houses took note this year. Now, industry leaders are taking tangible steps to solidify the trend. In recent months, both Christie’s and Phillips announced plans to open new headquarters in Hong Kong. An ongoing collaboration with Poly Auction yielded a twofold increase in yearly profits for Phillips. The auction house aims to narrow the gap between itself and competitors Christie’s and Sotheby’s with the Hong Kong expansion.

People pass by a CryptoPunk NFT in New York City’s Times Square. Image courtesy of Getty Images via Forbes.
People pass by a CryptoPunk NFT in New York City’s Times Square. Image courtesy of Getty Images via Forbes.

Shifts Toward Youth and Innovation 

Fears about the future of the art market still linger after nearly two years of the global COVID-19 pandemic. Yet some analysts are starting to view the crisis as a reckoning for the art market, one that will ultimately bring a brighter future. Art auctions are mired in traditions that stretch back centuries. Online auctions, ultra-contemporary art sales, and the expansion into cryptocurrency are still extremely new developments. Modernizing an auction house to accommodate those changes requires both technical infrastructure and financial support.

Thanks to a new generation of collectors, those shifts toward innovation became easier during 2021’s fourth quarter. Online sales soared over the last few months and achieved jaw-dropping records. Young artists shone especially bright. Art Basel at Miami Beach gave emerging artists their moment in the sun in late November and early December. Over the last few years, the major art week has become a pipeline from the art fair circuit to auction markets. Last year’s Art Basel Miami Beach stars are today’s auction darlings.

An untitled painting by Rick Lowe at Art Basel Miami Beach in November of 2021. Image by Sean Zanni/Patrick McMullan via Getty Images.
An untitled painting by Rick Lowe at Art Basel Miami Beach in November of 2021. Image by Sean Zanni/Patrick McMullan via Getty Images.

Digital art and NFTs are quickly becoming a fixture of auction catalogs. Far from being a fad, NFTs appear to be here to stay. They generated over $22 billion in trading volume this year alone. Christie’s recently announced that it achieved $150 million in NFT sales this year, positioning itself at the front of the growing digital art space. These results point to a future that will almost certainly place NFTs front and center. 

“2021 NFT activity was frenzied. That’ll subside in coming years and NFTs will settle into something more akin to today’s modern art market, where consensus on value is more solid. That said, it’ll be years before any crypto market, let alone NFTs, comes to resemble anything conventional markets would call stable,” George Monaghan, a GlobalData analyst, told The Guardian. “I wouldn’t throw your rainy day fund into any meme NFTs quite yet.” 

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Liz Catalano
Liz Catalano
Senior Writer and Editor

Liz Catalano is a writer and editor for Auction Daily. She covers fine art sales, market analysis, and social issues within the auction industry. She regularly collaborates with auction houses and other clients. A Chicago native, she holds a BSW degree and is based in Pennsylvania.

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