What the last four years of market slowdown should teach collectors
For the past four years, we have been documenting the art market correction quite closely: from the first slowdown in late 2022, the much tougher environment of 2023 and 2024, and the selective recovery that followed. Here are the key takeaways from these last few years that we think every collector should have in mind.
1. Buy the work, not the name
The correction has made one thing very clear: strong demand for an emerging artist in a thriving art market can easily hide the fact that said artist is actually not all that great. Early careers are mostly built on networking, so just because you favourite gallery is presenting someone new doesn’t mean that someone is good—obvious, but an important reminder.
However, trying to be entirely objective will also fail you when it comes to art, and your own subjectivity also tells you a lot about quality. So what happens when you actually like an artist’s work?
That’s where remaining critical is important. During a rising market, almost everything by a fashionable artist may seem easy to sell, and this will temporarily hide major differences in quality between individual works. But once liquidity tightens, the hierarchy inside the artist’s own production becomes much more visible. So, when push comes to shove and you want to sell an artwork, the quality of your piece will make a huge difference, especially when prices are down. Important periods, genuinely scarce or strong artworks—and convincing provenance when you buy on the secondary market— tend to hold up far better than lesser works carrying the same signature. Which is why we would always advise our clients: never buy a work you don’t particularly like, even by an artist you adore.
All of this is particularly relevant in contemporary art. Representation by a major gallery is useful information, but it should never be treated as a guarantee of long-term market relevance. Mega-galleries represent far more contemporary artists than can realistically retain the same level of demand over twenty years. Some artists on a roster will become historically important; others may simply generate strong primary-market turnover for a few years and lose momentum when conditions deteriorate. The recent correction gave plenty of examples of this dynamic, including within the rosters of some of the world’s leading galleries... Just check news.artnet.com.
A collector therefore has to make an additional judgment call that the gallery itself cannot make for them: which artists — and which works by those artists — are likely to remain relevant once the momentum disappears?
2. Buy artists with real collectors (i.e. temporary liquidity is not market depth)
Over the past twenty years, one of the biggest changes in the art market has been the massive expansion of its international collector base. New wealth in China and across Asia brought entirely new groups of buyers into Western modern, postwar and contemporary art. For many artists, this obviously strengthened the market: more collectors, more competition and more potential demand. As a result, some contemporary art markets became extremely active: works changed hands frequently and auction results multiplied, even when prices remained stable. That level of activity does constitute liquidity in the short term. And if you want to resell an artwork to hang something new in your apartment, it’s nice to have a buyer for it without waiting twenty years. But it is vital not to assume that it equates to market depth.
Don’t forget liquidity can also be generated by speculation and, as such, be fragile. If buyers are entering primarily because prices are rising, transactions themselves attract more transactions. The market appears deep because there is always another buyer. But when price expectations reverse, the same mechanism works in the opposite direction: speculative buyers leave, supply increases, prices for comparable works deteriorate and liquidity can disappear remarkably quickly. This is Market Finance 101. It’s also exactly why some of the most actively traded ultra-contemporary art markets proved among the most vulnerable during the correction, as we saw in recent years when Asian buyers pulled back.
Why? Because an international market is not necessarily a diversified market. You can have collectors buying an artist in New York, London, Hong Kong and Seoul and still discover that a large share of those buyers belong to the same generation, entered at the same moment and are responding to the same market incentives. When confidence disappears within that group, the shock travels very quickly.
So, when looking to acquire an artwork, the important question is not how broad the collector base is, but who actually collects the artist. Are the buyers mostly young speculative collectors? Established private collections? Museums? A mix of all of them? How many buyers would remain if prices stopped rising for three years? How much supply could realistically return to market if people suddenly started selling the works they own? A genuinely diversified collector base is much harder to destabilise than a market that merely looks global because the same type of buyer happens to be active in five different countries. A highly liquid market is useful in the short term—a market with committed collectors is much more valuable. As a sidenote, buying good art solves a lot of these problems, as quality endures in the eyes of real collectors.
This naturally leads us to our next point. If an artist is producing too much, you might see the market flooded with their work when the tide turns. You won’t ever see that in a market with genuine... scarcity.
3. Scarcity can make the difference between a market that endures and one that doesn’t
It’s always good to remind ourselves that, if scarcity can be detrimental to market liquidity, it can also be very beneficial as far as art is concerned. Some contemporary artists, for instance, are very hard to buy on the primary market because much of their best material is already reserved by institutions or major private collections. And, during the recent downturn, artists such as Lucas Arruda, Victor Man, Adrian Ghenie or Kai Althoff have benefited from relatively limited output, which helped preserve both scarcity and demand.
The opposite situation can be quite dangerous: when an artist produces very heavily for years, the market may eventually have to absorb far more material than the collector base can support. During boom periods, there is an obvious temptation to increase production in order to meet demand. But if too many works enter the market too quickly, scarcity disappears and the artist’s price structure becomes much harder to defend when demand slows down. In a rising market, this can remain almost invisible because galleries are still able to place the works. In a correction, however, the imbalance suddenly becomes obvious: more works start returning to the secondary market, buyers become more selective, and prices can come under pressure very quickly.
For collectors, a very practical question to ask before buying is therefore: how much work is this artist actually producing, and how much of it could come back to market over the next ten years? A strong artist with controlled output is usually in a much better position to withstand a downturn than one whose market depends on constantly finding new buyers for an ever-growing supply of works.
4. The art market is part of the broader economy
The last four years were also a good reminder that the art market doesn’t exist in a vacuum. For more than a decade, collectors operated in an environment of cheap money, low interest rates and abundant liquidity. Borrowing was inexpensive, art-backed lending grew significantly, and there was relatively little incentive to keep large amounts of capital in cash or fixed-income products.
That environment then changed very quickly. As rates went up, borrowing became more expensive, leverage became less attractive and suddenly holding a non-yielding asset like art came with a much higher opportunity cost. Collectors became more selective, dealers had less room to manoeuvre, and speculative segments naturally suffered first.
Interest rates don’t tell you whether a painting is good, but they massively affect the conditions in which people buy, sell and speculate. This is something collectors should keep in mind when trying to understand where we are in a cycle. Sometimes an artist’s market is not weakening because people suddenly decided the work was bad. There is simply less money chasing risk.
The opposite is also true: when capital becomes cheap and abundant again, some markets can start looking much healthier very quickly—sometimes healthier than they fundamentally are.
5. Be careful with auction results
Auction results are incredibly useful. In a market where most private transactions remain confidential, they are one of the few sources of public pricing information we have. But don’t mistake price transparency for market transparency.
An auction result can be affected by a lot more than pure collector demand. Some dealers and collectors hold large inventories and carefully control when works appear on the market. Galleries sometimes buy works by their own artists on the secondary market to support prices. Sellers naturally wait when conditions are unfavourable. And auction houses themselves have tools—guarantees, irrevocable bids, withdrawals, estimates—to make sales more predictable.
This means that a stable auction price does not automatically prove that a market is healthy. Imagine an artist whose works consistently sell around €500,000. That sounds reassuring. But the situation looks very different if there are twenty independent collectors competing at that level, versus one gallery and two major collectors effectively absorbing most of the supply.
Likewise, one auction record can distort perception for years if the circumstances behind it were exceptional. Have you ever thought maybe someone just bought that On Kawara “Date Painting” at an unreasonable price just because it happened to be their anniversary date?
So use auction results critically. Who was selling? How often do comparable works appear? Who is buying? Is the supply controlled? Are the artist’s galleries actively supporting the market?
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