The fine art auction market can act as a temperature measure for how high net worth and ultra-HNW people feel about the state of the economy and their own finances. Growth of online art auctions has increased rapidly this year because of the pandemic.

Online art auctions will play a larger part of the overall market in future even after the disruption caused by the COVID-19 pandemic ends, Citi Private Bank predicts.

The virus has upended in-person auctions, accelerating the use of web-based auctions and online viewing platforms. 

As reported in September, a study of the global art market showed that while sales in the first half of this year sank because of the disruption, online sales helped alleviate some of the pain. 

Online sales of art and collectibles were $4.82 billion in 2019, or just 7.5 per cent of global art sales, with expected growth rates only in the single digits, Citi Private Bank said in a commentary on the state of the art market. 

“That buyers have shown a willingness to bid millions or tens of millions of dollars online is a significant development. The strength of buying interest - despite the intense uncertainty of the pandemic and a deep economic downturn - is also encouraging,” the private bank said in its report, The Global Art Market and COVID-19.    

“Even when in-person auctions return in full, we feel that online sales are here to stay and will continue to play a growing role in the art market. Overall, the growth of online channels provides greater accessibility and convenience for collectors and others,” it said. 

“Throughout the ages, great artists have tended to push the boundaries, challenging themselves, their audiences, and the conventions of their medium. The market for art, by contrast, has historically tended to evolve somewhat less rapidly. Indeed, it is an understatement to say the art industry has been slower than many others to embrace digital technology,” it continued. "Still, there is nothing quite like a crisis as a catalyst for change. When COVID-19 hit last spring, galleries around the world were forced to close their doors; international art fairs were postponed or quickly went virtual, while major auctions were delayed. The art market’s response to these unprecedented restrictions was to embrace technology and the virtual world at long last,” it said. 

In March this year, Art Basel Hong Kong took the decision to hold an entirely virtual fair instead of the planned physical event. The virtual gallery gave viewers resources such as such as direct access to research and background information, and pricing data. Digital incarnations of the Frieze Art Fair in New York and Art Basel in Switzerland also used the same approach, the report noted.

Citi Private Bank also noted how auction houses Christie’s, Sotheby’s, and Phillips opted to combine their May and June sales into virtual sales. First up was Sotheby’s June 29 live streamed sale of Modern and Contemporary art. In total, the sale generated $363.2 million, with a sell-through rate - the proportion of lots sold - of 93 per cent. 

In the Christie’s auction, meanwhile, it reported that globally more than 80,000 people signed in to view the four hour-long sale, which realized $420 million.

The private bank ended its comment on a cautionary note. “However, there is at least one caveat here. Virtual-only auctions have made certain features of the market more fluid. The dates of major sales can now be shifted fairly easily, and with no traditional printed catalogues currently produced, the scheduled lots for a particular sale can change much less conspicuously. This actually makes it harder for collectors to keep track of developments prior to major auctions. Are works of art removed from virtual sales because of a lack of interested buyers, condition, or provenance issues? Today they simply disappear,” it said.