Art Basel Hong Kong Welcomes Back Collectors

As Art Basel returns to Hong Kong on a full-fledged scale after years of disruptions, a major gauge of success for the art fair will be how much wealthy collectors from mainland China spend as they travel once again after Covid restrictions ended.

"During Covid, what was most frustrating was being unable to see everyone in person," says Elaine Kwok, Managing Partner in Asia at Hauser & Wirth, "Art Basel was really a shadow of its former self. This year, we are all feeling so positive."

"The whole razzmatazz about the Art Basel Hong Kong has encouraged some really serious collectors to actually get on a plane. And a lot of people wanted to come to Hong Kong," says Philip Hoffman, CEO of The Fine Art Group.

Chinese collectors account for the world’s highest share of spending at the $1 million level, and their median expenditure is the highest globally at $475,000 for a piece of art, according to a UBS Group AG report last year. But sales of Chinese traditional paintings, among others, declined in 2022 due to economic uncertainty and China’s Covid Zero policy, Sotheby’s said in a report this month.

One major advantage of Hong Kong for art collectors is low costs, as the city has no customs duty, value-added taxes or estate duty on artworks, while Singapore has a goods and services tax of 8%. Hong Kong also has more robust logistics and warehousing facilities for storage. In a sign of confidence in the city’s art market, three of the world’s top auction houses have committed to expanding their offices in Hong Kong.

Nonetheless, the turmoil in the global economy is having an impact on the art market. While prices last year benefited as investors turned to the asset class as a haven, worsening economic conditions means it will be a “very particular” year for the market, said Leo Xu, senior director at David Zwirner gallery.

Collectors will be more discerning and look for blue-chip artists who will withstand the test of time, instead of works that might be cheaper alternatives. Xu said people are likely to “think twice” before buying something that’s just “something like Picasso” instead of the real thing.

Years of strict Covid restrictions have helped places like Singapore and Seoul take a bite of Asia's Luxury and art market.

But Hong Kong may be getting another chance.

#quicktake #hongkong #art

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