Millennials account for around 25-30% of the adult population and, according to a 2018 AXA report, between 15% and 25% of all art investors.

Those figures might sound unremarkable, but it’s worth remembering that Millennials are still in their mid to late 30s at the oldest, with the younger end of the generation only just into their 20s.

At that age, people are generally less likely to have disposable income to place into investments – instead still covering costs like tuition fees, rent and saving towards a deposit on a house.

So while first-time buyers have been getting older over the past few decades, all indications are that young people are if anything over-represented in the art investment market.

AXA France agent Frederic de Clercq said at the time of the report: “To better anticipate changes in this sector, it is important to focus on the generations that will be our customers of tomorrow, to figure out if their practices are different from those of their elders and, if so, in what way.”

How do Millennial art collectors differ?

AXA found several characteristics that were common across Millennial art collectors as a whole.

These included:

  • Relatively limited resources to invest.
  • Far-reaching interest and a desire to “know and look at everything”.
  • Less risk-averse and more explorative.

At the same time, some of the main characteristics of Millennial art collectors were similar to those of older generations too, including a focus on supporting and promoting artists.

Millennial art investors firmly in buy mode

The 2018 US Trust Insights on Wealth and Worth report from Bank of America found that Millennials aren’t just strongly represented among art investors; they are also more likely to buy.

At the time of its publication in summer of last year, 78% of art collectors said they planned to buy more artworks during the second half of 2018, but this figure increased to 97% of Millennials.

Less than half – 46% of those surveyed – had any plans to dispose of any of their investment pieces during the remainder of the year.

The report added: “High net worth Millennials are also a rapidly growing segment of the art market and are two times more likely than traditional investors to treat art as a financial asset.

“Thirty-six percent of Millennials currently own fine art, up from 28% last year [2017]. One third collect art because they see it as an asset that can be leveraged to build wealth, compared to 16% of all other art collectors.”

Do Millennials invest in art online?

As the first truly digital native generation, you might expect online art investment to be more common among Millennials, but AXA found that buying art online is not necessarily their preference.

Instead, Millennials typically use the internet to conduct research into particular artists and artworks, and for communication directly with artists.

But when it comes to buying a physical artwork, Millennials tend not to buy online or at auction – where prices can be driven higher – instead opting to buy from galleries where they can learn more about the work, or directly from their chosen artists.

The US Trust study shed more light on online art investment, and found a 43% year-on-year increase in the number of investors who had made at least one online purchase in 2018.

Overall, four in ten investors had acquired art online, 78% of whom were Millennials, and female investors had increased substantially from 16% to 36% of all investors who had bought art online in 2018.

How Millennials leverage art investments

While art has aesthetic appeal – and for many people this is still a factor in deciding what to buy and display at home – it is clear that Millennial art investors are also focused strongly on how they can leverage the value of the artworks they buy.

The US Trust research revealed that:

  • 72% of Millennial art collectors include art in their wealth planning (up 29%).
  • 23% of art collectors have used art as loan collateral and 20% more plan to do so.
  • Millennials also stand to inherit as 57% of baby boomers plan to leave art in their will.

Perhaps the most direct indication of how Millennials view the value of the art they own comes in the form of using a current collection as collateral to borrow money to buy more art.

Across all art investors, the US Trust found that 21% did this in 2018, up from just 7% in the previous year, and a possible sign that more are willing to speculate in order to expand their art collections by securing new investments against the value of their existing art.

 

https://group.axa.com/en/newsroom/news/are-young-art-collectors-reinventing-the-market

https://newsroom.bankofamerica.com/system/files/2018_US_Trust_Insights_on_Wealth_and_Worth_Overview.pdf

Disclaimer: The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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