Sales in the Chinese art market jumped 9 percent following the easing of Covid curbs in 2023 as buyers capitalised on postponed auction inventories, a report said on Wednesday.

The Art Basel and UBS Global Art Market Report 2024 said China surpassed the UK as the second-largest global art market in 2023, with its share surging to 19 percent by value.

The US retained its leading position as the largest global art market, with a 42 percent share.

The report said sales in the Chinese art market rose to US$12.2 billion across 2023 amid the easing of Covid restrictions. There was a strong surge in activity in the first half of the year, although the pace moderated in the second half.

“This changing trend was likely influenced by projections of slower economic growth and a persistent real estate slump in mainland China,“ the report said.

Post war and contemporary art remained the largest sector of the fine art auction market in 2023, while sales of modern art saw a slowdown.

“China’s strong rebound in 2023 contributed to the positive 15 percent boost in overall sales of Old Master paintings year on year to US$1.1 billion, just below their pre-pandemic level in 2019,” the report said.

The report noted that global art market sales slightly dropped to an estimated US$65 billion in 2023, down 4 percent year-on-year, but still surpassed the pre-Covid level of US$64.4 billion in 2019.

“2023 saw a much-anticipated easing in sales in the art market after two years of strong growth after the pandemic,” said Founder of Arts Economics Clare McAndrew, who pointed to factors such as high interest rates, inflation and political instability that subdued growth in the high-end markets.

Separately, Adrian Zuercher, head global asset allocation at UBS Global Wealth Management CIO, struck a positive tone regarding the art market growth outlook in Asia this year.

“Like other regions, the luxury industry in Asia has also encountered a shift in spending on entertainment and experiences. This applies to the Asian art market too, where many art world fairs and events have resumed full-scale and visitors have returned with enthusiasm.”

“From a wider economic perspective, growth in Asia is forecasted for 2024, driven by a shift in policy easing and a moderate expansion in the regional exports,” Zuercher said.

“Alongside the strength of financial markets, expected declines in interest rates, and weakening inflation, this offers hope for 2024,” said Paul Donovan, chief economist at UBS Global Wealth Management.

“We are observing a shift in the luxury market away from goods purchases towards spending more on ‘having fun’ - leisure travel, entertainment, and socialising, [which] should provide support for the sector,” Donovan added.

On another note, sales of art-related non-fungible tokens, or NFTs, were down 51 percent year-on-year to US$1.2 billion in 2023, after a peak of US$2.9 billion in 2021.