Art Market

Art, young people push market trends but Italy is slowing down

The rise of Millennials and Gen Z among buyers drives global trends. 22% VAT slows Italian collecting, but there are opportunities

by Margherita Ceci

26 March 2024

5' min read

Key points

High taxes and low salaries
Opportunities
Primary and secondary market

5' min read

The trends in the global art market in recent years speak for themselves: young people are livening up the sector. The generational change among collectors has seen a constant growth of Millennials and Gen Z, as highlighted by the latest reports by Art Basel and Deloitte, especially thanks to the push of the Apac countries, characterised by a strong dynamism of the young and very young market. But the phenomenon, contrary to what one might think, has also partly affected Italy: in the three-year period 2020-2022, Christie's has recorded a 45% increase in the number of Italian Millennials among members, buyers and bidders. Not only: by 2022 the under-39s have doubled, reports the study "Collectors and the value of art in Italy - 2024" by Intesa Sanpaolo Private Banking with the Bank's Art, Culture and Historical Heritage and Studies and Research Departments, which this year sees the presentation of the volume on Wednesday 27 March at 11.30 am with a streaming event.

High taxes and low salaries

Yet, the obstacles for initiated or aspiring collectors are not few, between high taxation - VAT for artistic goods is 22%, SIAE 4% - and low salaries. Problems that also affect galleries, so much so that relations between the government and Angamc (National Association of Modern and Contemporary Art Galleries) have intensified recently.

'We have noted a significant opening with regard to the reduction of VAT, also linked to the transposition of EU Directive 2022/542 on reduced VAT, which will be included in the next Budget Law,' Giovanni Bonelli, Angamc vice-president, explains to Il Sole 24 Ore.

"In the French manoeuvre the tax rate on works of art has already been reduced to 5.5%, which means that we, with 22%, are no longer competitive. The issue is not only the health of the galleries - forced to relocate - but of the entire art supply chain. If this reform is not carried out, artists, collectors and museums will suffer in cascade: the former will no longer see their works produced and will go to work in France, the latter will buy abroad, and museums, with increasingly limited budgets, will not have the fundamental support of galleries in the realisation of contemporary projects. This will result in a limitation of the artistic and cultural offer for the public and the possible loss of entire generations of artists'.

The opportunities

While the number of buyers under 40 is increasing, the financial commitment discourages aspiring young collectors. Yet, there are expedients to start approaching the art market from small sums, starting with the big international circuits such as the auction house Christie's. "Our Italian auctions are also often conceived as an entry level for new collectors," explains Elena Zaccarelli, senior specialist and head of sale in Milan for post-war and contemporary art. "For example, we often offer works without a reserve price - which therefore open at one hundred euro - or works by important names on the market but which, due to their nature (I am thinking of multiples) have lower starting estimates than a single work. There is no shortage of proposals from smaller realities such as Art Rite, an auction house rooted in Milan that with its dedicated 'U-3 Under 3k euros' auctions brings works for sale under 3,000 euros.

Alternatives to the more classic fine arts, design and photography can be a good starting point for newcomers thanks to their greater ease of use and lower prices. Similarly, focusing on emerging artists fresh out of the academies or buying directly from the source makes it possible to reduce the distance between buyer and bidder and to stay at lower prices. Platforms and online sales channels also allow you to select works according to your budget: one example is the art gallery of Paratissima - a reality born as a self-managed event parallel to the Turin fair Artissima, today an established incubator of emerging artists - where works on sale range from 50 to 5,000 euro.

There is no shortage - for those who see works as a refuge rather than an aesthetic asset - of financial instruments and funds investing in art, generally offered and managed by private individuals and dedicated to generating returns through the acquisition and management of art assets. They vary widely in size, managed assets and investment focus, but have a similar strategy that follows the traditional 'buy and hold' scheme: they buy works, hold them and aim for a profitable sale within a certain window of opportunity.

Primary and secondary market

In order to buy at lower prices, buying directly from artists remains the main route, albeit a riskier one, as it requires a certain eye to select the offer. It is no coincidence that the preferred purchasing routes for the very young are other: 43% of Gen Z, according to the latest Art Basel data, rely on galleries, compared to just 4% who go directly to artists.

"Art is very variable, it calls for a relationship of trust with the gallerist. This trust, which fortunately exists and is fundamental, allows the gallery owner to exist, otherwise he would have already disappeared, because with all the portals there are, it is very easy to put the artist in contact with the public. However, it has to be said that an artist needs galleries to start up and become structured". This is Massimiliano Lorenzetti, 29, who in 2021 bets on working as a gallery owner by opening L.U.P.O. (Lorenzelli Upcoming Projects Organisation), a reality focused on artists under 30 and which, thanks to the young nature of the project, manages to involve a public of the same age. "I then chose not to work on a percentage basis with the artists, but to hire them with exclusive contracts (so I pay for everything, colours, canvases, etc.); in this way they don't have to work three jobs to support themselves and then devote their free time to art, but can do just that. Because it is not a hobby, it is a job. Galleries when they work well remain strong,' he continues, 'because they give the certainty of a relationship with the client and the artist. This is not possible online, on the other hand, on portals'.

The popularity of external online platforms, however, past the tail end of the pandemic, has declined considerably: from 17% in 2022 to just 8% in 2023, Art Basel's figures again say. Auctions on the other hand remain, after galleries, the preferred channel, with 22% of Gen Z turning to them. "In the past, the auction house has sometimes been experienced as a somewhat formal environment and consequently less suitable for a young collector who is starting to approach art", Zaccarelli comments again. I believe that online auctions have instead been perceived as an "independent", immediate and direct modality, much loved also by young people".

On Wednesday 27 March, starting at 11.30 a.m., there will be the streaming event for the presentation of the book Collectors and the Value of Art in Italy - 2024, an editorial series born from the collaboration between Intesa Sanpaolo Private Banking and the Bank's Art, Culture and Historical Assets and Studies and Research Departments