The art market has lost momentum in recent years, with cumulative profits from the world’s most expensive auction pieces declining by hundreds of millions of dollars. But that hasn’t stopped the top one percent from using their art collections for business purposes.
The world’s largest banks are increasingly seeing their clients use expensive artwork as collateral. The total value of loans taken out against artwork has risen from $20 billion in 2019 to an estimated $36 billion by the end of this year, according to data. Bloomberg News.
“If you are an owner and need liquidity now, delay selling, instead take out a loan against your art and wait for better market conditions,” Adriano Picinati di Torcello, global art and finance coordinator at Deloitte, told the outlet.
Both Bank of America and Citigroup have teams dedicated to serving clients with high-value art collections. At Bank of America, lines of credit taken out for art increased by nearly 15% last year. At the same time, art sales have slowed: In 2022, the total value of the ten most expensive works of art sold at the May auctions was $760 million. Last year, it was $403 million. This year, the total value was $1,000, according to Bloomberg.
Despite the market slowdown, financial experts stress that art loans remain particularly effective because the value of a work of art is less volatile than with other forms of collateral.
“Even though interest rates are higher, art is a very stable asset in terms of volatility compared to other assets over the long term,” Fotini Xydas, head of art finance at Citi Private Bank, told Bloomberg.
“It’s not every day that we ask how much your Andy Warhol is worth,” Katy Lingle, U.S. head of credit solutions at JPMorgan Chase & Co. Private Bank, told the outlet.
Read on to learn about the 10 most expensive works of art sold at auction in 2023.
