Continuous Decline Since 2023
Low Participation and Shrinking Scale at Art Fairs
No Signs of Rebound... Bleak Outlook for This Year
Art Busan 2025 concluded on May 11. This year, the number of visitors to Art Busan was 60,000, marking the lowest figure since the COVID-19 pandemic. The number of participating galleries was also at its lowest in the past five years, with 109 galleries from 17 countries. The prolonged economic downturn has led to a stagnant art market, resulting in declining performance for Art Busan as well. The number of participating galleries decreased from 145 galleries from 22 countries in 2023 to 129 galleries from 20 countries in 2024, while the number of visitors dropped from approximately 100,000 in 2022 to 70,000 in 2023, and further to 60,000 this year. Sales are also reported to be at their lowest level in the past five years. In 2022, 100,000 visitors generated sales of 74.6 billion won, but the market has remained sluggish since then without any rebound.
This downturn is also clearly evident in the auction market. According to the Arts Management Support Center on May 19, the total value of artworks sold at both online and offline auctions by the top 10 domestic auction houses last year was 1.1127 trillion won, the lowest in the past five years. The auction success rate dropped by 2.5 percentage points year-on-year to 46.7%, a significant decline compared to the 66.4% recorded during the boom in 2021. The number of auctions held was 266, down by 11 from the previous year, and the number of lots offered was 24,023, a decrease of 15.9% year-on-year.
K-Auction and Seoul Auction, which together account for over 80% of the domestic art auction market, recorded a total auction sales amount of 55.9 billion won in the first half of this year, a 3.6% decrease compared to 58 billion won in the same period last year. According to the industry, K-Auction performed relatively well, but the decline in Seoul Auction's results was more pronounced, allowing K-Auction to overtake Seoul Auction in market share. Meanwhile, the affiliated research institute 'KAI' of the Korea Art Appraisal Research Center reflected the difficult situation in the art market last year by citing negative keywords such as decline, decrease, and litigation. The decline in market trust due to issues such as forgery controversies was also identified as a major reason, leading to the analysis that restoring trust is urgently needed.
Last year, art transactions showed a clear trend of prioritizing aesthetic satisfaction over investment value. Works priced between 100 million and 500 million won accounted for 60% of all transactions. However, the contraction of the mid- to low-priced market has become even more pronounced.
Sales were concentrated on popular or highly regarded artists. In the first quarter of this year, the highest price at Seoul Auction was for Kim Whanki's "Untitled" (370 million won), followed by "Daedongyeojido" (320 million won), Yun Hyongkeun's "Umber" (230 million won), and Kim Tschangyeul's "Water Drops." Some ultra-high-priced works were withdrawn from auction or had their prices adjusted. At K-Auction, Kim Whanki's "Untitled" (780 million won) recorded the highest price, with Chun Kyungja's "Baekil" and David Hockney's "The Arrival of Spring in Woldgate, East..." (260 million won) also among the major traded works.
The art fractional investment market has also not escaped the downturn. All fractional investment subscription offerings this year were undersubscribed. Of the fourth round of investment contract securities issued by Yelmae Company, worth 1.3 billion won, Yayoi Kusama's "Pumpkin" (740 million won) had a subscription rate of only 50%, failing to reach the target amount. Out of 7,400 shares, 3,328 remained unsold, and the subscription rate among general investors was also only about half. Two works by Yoshitomo Nara (each priced at 298 million won and 212 million won) saw similar subscription rates.
The first fractional investment public offering by Artipio, a subsidiary of YES24, recorded a subscription rate of 39.34%. Of the 780 million won worth of contract securities issued based on David Hockney's iPad drawing, only 35.41% were subscribed. Together Art's subscription, totaling 950 million won, also reached only 53.82%. Overall, fractional investment subscriptions in the first quarter of this year showed a sluggish trend.
This downturn is likely to continue this year. Domestic political instability and a sharp rise in the exchange rate are creating obstacles for participation in global art fairs, as well as for the import and transportation of artworks. In addition, there are no newly emerging domestic blue-chip artists. With no clear catalyst for a rebound, the prevailing outlook is that the stagnation will be prolonged.
Son Icheon, director at K-Auction, stated, "Last year, the art market was as depressed as it was in 2020 during the COVID-19 period," adding, "Although we are hoping for a rebound this year, there are no clear signs of recovery across the industry." He continued, "K-Auction performed relatively well in the first quarter, with sales increasing compared to the same period last year, but since the art market is heavily influenced by external factors such as interest rates and liquidity, changes in the macro environment are necessary for a market recovery."
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