Just a little over two years in the past, closing a deal was comparatively easy and fast for gallerists buying and selling in ultra-contemporary artwork. A collector got here to a present or a good, noticed one thing they appreciated or was scorching, and acquired it, few questions requested. In right now’s cooling market, the choice course of is longer and extra fraught, with loads of time to bail out or head for the safer waters of extra established post-war artists.
That’s the essence of the 2024 artwork market, in response to the annual Art Basel and UBS Global Art Market Report, written by arts economist Clare McAndrew and launched on Tuesday. International gross sales contracted by 12 p.c to $57.5 billion, marking the second consecutive yr of decline after a post-pandemic euphoria propelled the market to $68.1 billion in 2022.
Within the ahead to the report, Christl Novakovic, head of UBS International Wealth Administration Europe, Center East, and Asia, writes that “Regardless of challenges in sure sectors, the artwork market stays resilient. Easing inflation, secure inventory markets, and decrease rates of interest, supply welcome developments.”
Clearly that part of the report was written earlier than President Donald Trump’s international barrage of bewildering tariffs chewed by means of international markets over the past week. In accordance with The Economist, the tariffs and the predictable retaliation they’ve impressed are “wreaking havoc” on the inventory market, with the S&P 500 teetering on a bear market. The longer term, the Economist wrote, appears to be like extra grim than the “the worst intervals after Lehman Brothers went bust in 2008 or any equal in the course of the Covid-19 pandemic.”
But beneath the disappointing headline figures lurks a extra nuanced actuality, at the very least for the artwork market: the amount of transactions really elevated by 3 p.c to 40.5 million final yr, suggesting an artwork market reconfiguring itself relatively than one in the midst of collapsing.
Let’s name it The Nice Bifurcation. The highest finish of the market, which drove the restoration after COVID, has cooled dramatically. However there’s vitality and spark at extra accessible value factors. In accordance with the report, gross sales of artworks exceeding $10 million at public sale plummeted by 39 p.c in 2024, following a 27 p.c decline the earlier yr. These ultra-high-end works now signify simply 18 p.c of the market’s worth, down from 33 p.c in 2022. In the meantime, the marketplace for works underneath $50,000 has expanded each in worth and quantity.
This fork available in the market may upend conventional energy buildings. Smaller galleries with annual turnover underneath $250,000 noticed gross sales improve by 17 p.c in 2024, whereas blue-chip sellers with turnover exceeding $10 million skilled a 9 p.c decline.
Whereas some may see in these figures a sluggish deteroriation of the general market, McAndrew means that the market is as a substitute rebalancing. After years of backside traces pushed by record-breaking costs, galleries are as a substitute stepping into the black and smaller offers, and many them.
(It needs to be famous that the Artwork Basel and UBS Survey of International Accumulating, which launched final fall, and was additionally written by McAndrew, got here to the same conclusion.)
Modern Artwork Flounders
Maybe most shocking is the relative underperformance of latest artwork, which for a lot of the latest previous was the engine of market development. Sellers specializing completely on this sector reported an 11 p.c drop in gross sales, whereas these centered on older segments like Publish-Battle, Fashionable, and even Outdated Masters fared significantly higher.
At public sale homes, the sample was related. Modern artwork gross sales declined by 36 p.c to $1.4 billion, their lowest stage in six years. Works created inside the final twenty years carried out notably poorly, with gross sales falling 43 p.c year-on-year to $1.1 billion—simply one-third of their 2021 peak.
As public gross sales slowed, discretion turned de rigueur for high-value transactions. Non-public gross sales by means of public sale homes elevated by 14 p.c to $4.4 billion, with Christie’s reporting a exceptional 41 p.c surge on this channel. For Sotheby’s, personal gross sales reached $1.4 billion, representing 23 p.c of their enterprise, up from 15 p.c a yr earlier.
After the pandemic-induced surge in on-line gross sales, the market seems to have discovered a brand new equilibrium between the digital and the bodily. On-line gross sales accounted for 18 p.c of whole market worth in 2024, double the pre-pandemic share however secure year-on-year.
The composition of those digital gross sales has advanced considerably. Relatively than third-party platforms, sellers have invested closely in their very own web sites and digital infrastructure, which now generate 17 p.c of their whole income—greater than double the 8 ercent recorded in 2019.
This shift displays altering collector conduct. In a survey of high-net-worth people, 52 p.c reported preferring to purchase from sellers on-line with out viewing works in particular person, in comparison with simply 30 p.c in 2023. Curiously, gallery attendance has additionally elevated, suggesting collectors are viewing exhibitions however finishing purchases remotely.
The Value Conundrum
Maybe essentially the most urgent problem going through the commerce is speedy value inflation in opposition to a backdrop of declining gross sales. Working bills elevated by roughly 10 p.c throughout the sector in 2024, with notably sharp rises in delivery (15 p.c), artwork honest participation (16 p.c), and journey (11 p.c).
Artwork festivals stay essential gross sales channels, accounting for 31 p.c of seller income (up 2 p.c from 2023). Nonetheless, the expense of participation has grow to be more and more prohibitive, particularly for smaller galleries.
“Artwork festivals have gotten increasingly more influential,” one nameless seller mentioned within the report. “Nonetheless, rising bills reminiscent of participation charges and delivery make it troublesome to keep up a worthwhile tempo.”
One other seller put it a bit of extra sharply. “The winner-takes-all financial system bites in a downturn. Participation in even the best-reputed artwork festivals is at present too costly for a small avant-garde gallery that isn’t an aristocrat’s plaything.”
Silver Linings
Regardless of these challenges, the report is way from a eulogy. Feminine artists are gaining floor, with major market galleries reporting 46 p.c feminine artist illustration (up from 42 p.c in 2022) and gross sales from feminine artists growing to 42 p.c of income. Sellers are additionally efficiently reaching new audiences, with 44 p.c of consumers in 2024 being new to their companies.
So then, there’s a consensus that cautious optimism will prevail. One-third of sellers anticipate enhancing gross sales, whereas 47 p.c anticipate some form of stability. The public sale aspect is extra pessimistic, with solely 15 p.c forecasting development. Most companies plan to keep up present staffing ranges, suggesting the commerce is making ready for a interval of consolidation relatively than enlargement.
As rates of interest proceed to fall and wealth creation accelerates among the many ultra-wealthy, the basics for restoration stay in place. Nonetheless, the period of speculative shopping for seems to have yielded to a extra measured, thought of method to accumulating—one which will finally produce a more healthy, if considerably smaller, artwork market.
The largest takeaway for me—based mostly on conversations with sellers over the past yr, and confirmed by the report—is that collectors are leaning into shopping for what they like, relatively than specializing in funding returns or what’s scorching. Whereas individuals could also be shying away from six- or seven-figure purchases, a market with extra transactions is a extra secure and probably extra democratic one. It may very well be a much less elitist market too, although which may compete with the artwork world’s inherent exclusivity.
What’s extra sure is that galleries and sellers need to more and more discover new methods to navigate the artwork market’s—and the broader financial system’s—quickly evolving panorama.
