A new report commissioned by The European Fine Art Foundation (TEFAF) found that a change in luxury spending habits caused by the recession has helped the international art and antiques market weather the global economic storm. The report, "The International Art Market 2007-2009, Trends in the Art Trade during Global Recession" was prepared by Dr. Clare McAndrew, a cultural economist specializing in the fine and decorative art market and founder of Arts Economics.

Wealthy buyers have been switching away from expensive cars, yachts and jets in favor of assets with long-term tangible value such as art and antiques. These ‘investments of passion’ mean that, although the world market in art and antiques has suffered during the economic downturn, it has performed far better than expected.

“As economically recessive conditions in many countries have led to a reduction in incomes, demand for and consumption of many luxury goods has also contracted,” says the report. It adds that the world financial crisis produced a drop in the number of High Net Worth Individuals (HNWIs) – people with investable assets of at least US$1 million. Nevertheless the share of art in HNWI's ‘investments of passion’ actually rose from 20% in 2006 to 25% in 2008, as investors looked to find assets that had a more enduring value.

“The geographical distribution of wealth has also worked in favor of the art market. While most of the older Western economies are currently in recession, many of the new art markets are still showing positive growth, with China and India at rates of 9% and 6% respectively in 2009.”

Among the key findings of the report are:

• In 2008, total sales in the global market for fine and decorative art reached just over €42.2 billion, down over 12% from its peak in 2007 of €48.1 billion. In 2009, sales are estimated to have slipped further, dropping by about 26% to €31.3 billion. However sales in 2009 are still well above any year of the arts market’s history before 2006.

• Just under 50% of the value of all transactions in the global market took place in the EU in 2008, which then achieved a total market turnover of €20.7 billion.

• The US and UK continued to dominate the global art and antiques market in 2008, with a share of respectively 35% and 34% of the value of all transactions.

• China has continued to gain share in the global market. Since 2007, it achieved the third largest sales worldwide. The Chinese art market bucked the trend in the rest of the world and increased aggregate sales in 2009 by 12%, boosting its share of the global art market to 14% (US 30%, UK 29%).

• The auction market for Contemporary art grew from €92 million in 2002 to €915 million in 2008. Just as it had been a leader in the expansive phase of the art market, the Contemporary sector has also fared worse than other sectors, dropping by 60% to €378 million.

• More traditional categories have performed well throughout the last few years. Old Master paintings, for example, are now regarded as a strong sector in which to collect and invest.

The price of the report is €15 and can be ordered at www.tefaf.com.