The global art market enjoyed a lively 2018, despite the falling value of most financial assets, according to a report from Art Basel presented by UBS. Sales were up 6% to USD 67.4bn, the second-highest level in the past decade. The number of transactions rose by 2%, and the price of many works of art continues to advance. Values have risen around 9% since 2008.

We do not view art as an asset class, as we have no desire to detract from art’s real value as a source of expression and insight. Despite the potential for appreciation of some works, we also believe that as a source of long-term wealth creation, traditional financial assets have the edge.

Yet the art market can hold up a mirror to broader trends in global wealth creation, technology, and society.

* Millennials are on the rise as collectors. In previous surveys of US collectors, conducted as part of ongoing research into investor sentiment by UBS Investor Watch, the majority of respondents were aged 50 years and over. However, in the newer markets in Asia, a very different age profile emerged in 2018: in Singapore and Hong Kong respectively, 46% and 39% of collectors were millennials . Millennial collectors made up just under half (45%) of the high-end spenders (USD 1 million plus), underlining the importance of the spending power of this demographic.

* Online sales are increasing. The online art market reached an estimated new high of USD 6 billion in 2018, up 11% year-on-year. At 9% of the value of global sales this is slightly lower than the global online retail sector, where e-commerce represented 12% of total retail sales in 2018.

* The global nature of the art market means it can be resilient to political headwinds. Art markets tend to respond to long-term trends in wealth creation. For example, China gradually rose up the global rankings as its economic heft increased, becoming the second-largest art market for the first time in 2010, behind the US and overtaking the UK. However, in 2018 the UK regained its position as the world's second-largest market by sales, despite Brexit uncertainty, in large part because the value of sales to and from the UK art market is dominated by non-EU trade.

So the art market offers a fascinating reflection of economic developments and trends in wealth creation. But we believe its real value is as a source of pleasure and cultural enrichment.