The art market had a brutal 2024, with global sales declining 12 per cent by value, according to a new report by Art Basel and UBS. The report comes at a time when the art market is bracing itself for a potentially devastating blow from global tariffs and collapsing equity markets, which could rock its increasingly shaky foundations.
“There are some signs in the US that politics has perhaps started to play a role in exercising a degree of caution in the market,” Mr Donovan says. “You are not going to react to every fluctuation in the equity market, but where you get a more profound concern (is a) question about liquidity in the future: ‘Can I really afford to use this money to go out and buy this piece of art? Maybe we need that for expenses if there’s an economic downturn.’”
The report also articulates an industry under pressure. The price of doing business has risen for galleries in particular, with 43 per cent of them reporting they were less profitable than the year prior, an 11 per cent increase since 2022.
Of particular note, given that this report is published by the art fair Art Basel, it details art dealers’ increasing displeasure with art fairs.
“Much of the discussion and comments from dealers in the survey and interviews concerned the rapidly escalating costs of art fairs,” the report reads, quoting one anonymous dealer, who says: “The number of people at fairs is increasing. However, the number of buyers is actually decreasing.”
The fair model does not appear to be thriving either. From 2020 to 2023, 129 fairs ceased operations, the report says, while only 39 started in the same period. In 2024, 31 fairs closed, and just two began.
Even though the report was compiled before tariffs were dominating headlines, dealers and auction houses were already glum about their 2025 prospects.
Only 19 per cent of the largest dealers thought sales would improve this year. Overall, 47 per cent of all dealers were hoping for a stable year; 33 per cent thought sales would improve (down 3 per cent from a year earlier); and 19 per cent anticipated they would fall (up 3 per cent year over year). At mid-tier auction houses, only 15 per cent of respondents anticipated improved sales; 40 per cent forecast a decline.
“I like to be able to say positive things, but this is the market we’re in at the moment,” Dr McAndrew says. “Maybe it will surprise us and turn around again.
The pain was spread across borders. Sales in the United States fell 9 per cent by value year over year. In China, they fell 31 per cent, to the lowest level since 2009. Sales in France declined 10 per cent, Germany 4 per cent, Italy 10 per cent and South Korea 15 per cent.
This marks the second down year in the art trade, which continues to struggle with something akin to an identity crisis.
Collectors have bridled at what they perceive to be inflated prices; enthusiasm has foundered amid perceptions of a directionless contemporary market; and buyers have turned away from many “hot” artists, who just a few years ago, had seemed inviolable.
The only unvarnished good news in the report comes via transaction volume, which was up 3 per cent year over year, driven by what the report outlines as lower-priced objects in the low six figures or below.
“What we’ve been seeing is the ongoing process of what I would characterise as democratisation in the art market,” says Mr Paul Donovan, chief economist at UBS Global Wealth Management. “The number of sales is going up, but the value of sales is not going up in the same way.”
Collector turnover
However diminished, about US$58 billion (S$78 billion) of art was sold in 2024, says Mr Noah Horowitz, chief executive of Art Basel. “That’s a lot of art.”
One indication could be collector turnover. Even as art dealers collectively sold 6 per cent less by value than in 2023 (which, in turn, was down 3 per cent from the year before), 44 per cent of the people they sold to were new to their business – which could indicate that a potentially significant chunk of their previous clientele was no longer buying.
“This plays directly to the reality of where the market is,” says Mr Horowitz. “A lot of the collectors who set the pace of the market in a 30-year arc – some of them are passing away, others are not collecting with the same aplomb that they once were, and their children are doing slightly different things.”
The report quotes one anonymous dealer who says “existing young collectors are no longer buying paintings”, and adds: “With the bursting of the Contemporary art bubble, there is a high reliance on older collectors who prefer Modern and Post-war art… (but) many of these collectors are in their 60s and 70s, so I am worried about what the art scene will look like 10 years from now.”
The bottom’s up
When new people do buy new art, it seems they are unwilling to spend as much as their predecessors.
Auction houses’ public and private sales were down 20 per cent by value, but sold 4 per cent more by volume year over year. At the high end, the number of fine art works that sold at auction for over US$10 million plummeted 39 per cent year over year. Sales values in that price category also declined 45 per cent. The total value of the top 50 works sold at auction declined 30 per cent year over year.
It was the same story at galleries, which sold a median of 75 works in 2024, the same as the year prior. And yet, the top end was not delivering that stability. The world’s biggest dealers saw an average of 89 high-end buyers in 2024, down from 164 in 2023.
These same dealers reported that one-third of their sales were in the sub-US$50,000 segment; 60 per cent were for less than US$250,000. Just 2 per cent of all dealers’ transactions took place over US$1 million, down from 4 per cent in 2021.
The industry looks ahead
The report comes at a time when the art market is bracing itself for a potentially devastating blow from global tariffs and collapsing equity markets, which could rock its increasingly shaky foundations.
“There are some signs in the US that politics has perhaps started to play a role in exercising a degree of caution in the market,” Mr Donovan says. “You are not going to react to every fluctuation in the equity market, but where you get a more profound concern (is a) question about liquidity in the future: ‘Can I really afford to use this money to go out and buy this piece of art? Maybe we need that for expenses if there’s an economic downturn.’”
The report also articulates an industry under pressure. The price of doing business has risen for galleries in particular, with 43 per cent of them reporting they were less profitable than the year prior, an 11 per cent increase since 2022.
Of particular note, given that this report is published by the art fair Art Basel, it details art dealers’ increasing displeasure with art fairs.
“Much of the discussion and comments from dealers in the survey and interviews concerned the rapidly escalating costs of art fairs,” the report reads, quoting one anonymous dealer, who says: “The number of people at fairs is increasing. However, the number of buyers is actually decreasing.”
The fair model does not appear to be thriving either. From 2020 to 2023, 129 fairs ceased operations, the report says, while only 39 started in the same period. In 2024, 31 fairs closed, and just two began.
Even though the report was compiled before tariffs were dominating headlines, dealers and auction houses were already glum about their 2025 prospects.
Only 19 per cent of the largest dealers thought sales would improve this year. Overall, 47 per cent of all dealers were hoping for a stable year; 33 per cent thought sales would improve (down 3 per cent from a year earlier); and 19 per cent anticipated they would fall (up 3 per cent year over year). At mid-tier auction houses, only 15 per cent of respondents anticipated improved sales; 40 per cent forecast a decline.