Where is the art market headed now ?

Since the shockwaves of 2022/2023—rising interest rates, squeezed liquidity and a pause among speculative buyers—, the global art market has not returned to its pre-pandemic boom. Instead, it is by all accounts still undergoing a recalibration. The first half of 2025 was once more marked by contraction: global fine art auction sales fell nearly 9% year-over-year, and the average price per lot dropped to its lowest level in a decade, according to Artnet’s most recent Intelligence report. Yet this decline looks less dramatic when set against the previous year, when H1 2024 sales had plunged almost 30% compared to the same period in 2023—suggesting that, while still in negative territory, the market’s descent is slowing.

Last year was worrying for the auction market to say the least: the Financial Times recently reported that the revenues made from commissions and sales fees by Sotheby’s were reduced by 18%—from $813 million in 2023, to $994 million in 2024. The auction house’s loss more than doubled in 2024, reaching $248 million in 2024, compared to 2023’s $106 million. The last two years have also taken their toll on the primary sector and galleries are under visible strain, with closures in New York, Los Angeles and even in London as some of the pandemic-era expansion stories reach their natural limit. However, beneath the worrisome news lies a quieter story: a market that is shedding excess, clearing the stage, and allowing different kinds of art to come to the forefront, with pockets of robust demand where quality, story and provenance still matter. As we will see the market is smaller in places, structurally different in others, but far from collapsing.

Pink Shorts (2019) by Amoako Boafo

The most brutal correction at auctions has been in the ultra-contemporary sector—the category once dominated by names barely out of their MFA programs, often minted into six-figure stars overnight. This segment has known a 31.3% decline in H1 2025 compared to the first half of 2024, according to Artnet’s mid-year review. A telling example is Amoako Boafo: at London’s March 2025 evening sales his Pink Shorts hammered at £180,000, barely meeting its low estimate—essentially a reversion to primary-market pricing after the artist’s boom-era peaks. This softening aligns with broader cooling across the category: Artnet’s data shows auction sales of work by African-born artists fell 36% in 2024 versus 2023, underscoring the retreat from the frothiest ultra-contemporary names. If the descent is painful for some, for the market as a whole, it is a much- needed dose of realism. It means that those artists who continue to hold collectors’ attention do so for deeper reasons than speculation alone. In parallel, other names are gaining ground with steadier, more organic momentum. Yu Nishimura, for instance, has drawn increasing attention with his intimate, psychologically charged portraits and his mastery of a visual feeling of evanescence. His record at auction this year—over $400,000—is modest compared to the froth of yesterday’s stars, but it signals a collector base genuinely responding to the quality of the work, not just the promise of a quick return.

At the same time, the internationalism that once fed speculation on ultra-contemporary art is fragmenting. Chinese collectors who used to chase ultra-contemporary “hot lots” at New York’s Now sales, pushing the likes of Amoako Boafo to dizzying heights, have since retreated. After the crash in that speculative segment, many have re-centered on their domestic markets or withdrawn altogether. The shift shows in the numbers: Christie’s breakdown of the first half of 2025 reveals that Asia-Pacific countries accounted for only about 21% of buying power at major sales, while the Americas supplied nearly half—a reversal of the momentum we saw during the 2010’s boom, or more recently during the post-pandemic boom. Hong Kong and mainland Chinese auctions have rebounded in pockets, but not nearly enough to counterbalance the drop in international bidding. As France24 (AFP) reported in March 2025, the Chinese auction market shrunk to $1.8 billion in 2024, from $4.9 billion in 2023—a 63% decline highlighting the retraction of Chinese collectors from art spending even at a regional level. Their absence leaves thinner demand for young Western names, and underscores how regional gravity is once again shaping the global art economy.

Sotheby's Asia hub in Hong Kong

The correction is not limited to auctions: galleries are facing equally tough realities. The most recent Art Basel/UBS data shows the dealer sector contracting in recent measurement, underscoring the structural slowdown dealers face, triggering a wave of consolidation and closures. Recently, there has been quite a few accounts of galleries cancelling their participation in art fair editions to rationalise costs, as they recalibrate business models; and news of established galleries shutting down have continuously made the headlines this summer, citing unsustainable overheads in the context of changing collector behaviours. In New York, Kasmin Gallery announced it would shut its doors after 35 years, a symbolic reminder that even first-tier players are not immune. In Los Angeles, several spaces have merged or quietly shuttered, citing rising rents and slower sales. And in Europe, Clearing—long considered one of Brussels’s most dynamic younger galleries—closed its space earlier this year, pointing to the same pressures on mid-tier operations navigating a shifting collector base.

As harsh as that reality can seem, what we are witnessing is a refinement of the ecosystem: these closures also present opportunities for emerging galleries and artists to fill the void and redefine the art scene. In this market landscape, one can assume that the galleries that will continue to thrive will be those that stay lean, resist the temptation of over-expansion, and invest instead in curatorial depth. For collectors and artists alike, this pruning means fewer distractions. When a gallery mounts a show today, they better truly believe in the work: the cost of gallery space is as high as it has ever been, and the contraction of the primary market definitely encourages favouring quality over quantity.

As we have seen in a previous analysis of ours, interest-rate pressure was one of the primary external factors that impacted the flow of cash into the art market. The past three years of higher borrowing costs raised the opportunity cost of holding art, reduced margin for leveraged buying and constrained dealer liquidity. In short: lower rates had fuelled speculative demand by seductively luring people into thinking of art as an interesting investment, before rising rates removed that tailwind, forcing a re-pricing of risk and a drop in the amounts allocated to art investments. So, how have things evolved in that regard? After rapid increases in 2022–2023, rates plateaued in 2024, with a slight decrease or stabilization in early 2025. More recently, the FED announced a new cut of its short-term interest rate by 0.25% on 17 September, leading financial analysts to speculate that we are currently entering a cycle of decreasing interest rates. With the FED’s interest down at 4% in September 2025 from 5% one year earlier, the numbers do not justify any major change in collector behaviours, as the opportunity cost of investing in art remains relatively high. However, it does provide a context of stability, which seems to support a selective recovery in certain segments of the market—for those who can adapt, that is.

Courtesy of Reuters

Auction houses and galleries have already adjusted their strategies to navigate this new environment. Dealers have tightened consigning standards, auction houses use advances and guarantees selectively and some private sales and institutional purchases have stepped in to bridge gaps. The net effect is less frantic volume at the top end, but better-qualified transactions when works meet stringent curatorial or collecting criteria. On top of that, private sales and art-backed loans have continued to grow as alternatives to traditional financing. For example, Sotheby’s recently launched an art-backed bond, raising $700 million and attracting institutional investors.

Another development to note in what remains a timid auction market: high-value single-owner collection sales (sometimes pre-funded by houses) are being successfully used to create headline moments even amid a cautious market—evidence that institutions and wealthy collectors still move when provenance and narrative are compelling. An example of this came very recently with Pauline Karpidas: The London Collection at Sotheby’s London on 17 September 2025. The evening sale of around 55 lots totaled $99.6 million (£73.19 million), far above its pre-sale expectations of $53– 75 million. Crucially, the auction achieved a 100 percent sell-through rate—a rare “white-glove” sale that underscores both demand and renewed confidence for top-quality works. The star lot, René Magritte’s La Statue volante (1958), estimated at £9–12 million, sold for about $13.77 million, while nearly 70 percent of the works offered exceeded their high estimates. Together, these results point to a collector base still eager to compete when provenance and rarity align.

As a consequence of market players adapting to the new environment, signs of stabilization are emerging in the art market. Indeed, a striking development during the first half of 2025 is the resurgence of some portions of the market. While the headline-grabbing nine-figure trophies are rarer, sales between $1 million and $10 million are up by nearly 14% in the first half of 2025, still according to the latest Artnet Intelligence report. Collectors are showing confidence in this bracket, which offers both quality and relative stability. The Old Masters segment, almost forgotten in the frenzy of the last decade, has also surged by almost 25%, suggesting a return to works with proven depth and historical weight. This rediscovery of the “middle ground” carries consequences for artists. Those with established exhibition histories, institutional support, and solid markets are finding renewed attention.

Lastly, there are several reasons to look forward to the coming months. The first one being Art Basel Paris, this October, which promises to be grandiose. Revived in the newly renovated Grand Palais, this edition of the art fair has already drawn in galleries presenting museum-quality works, ambitious public art commissions along the Avenue Winston-Churchill, and a program bringing together emerging artists and avant-garde legacies. Such a mix tends to galvanize collector energy by compressing decisions into a short VIP window, moving waiting lists, prompting institutional holds, and triggering private sales. Which is why strong editions of the Basel fair have historically served as reset points for the market after downturns, sparking renewed demand and confidence among both institutions and private buyers.

Courtesy of Art Basel Paris

Another reason for guarded excitement: some of the big evening sales in New York this coming November are already showing exceptionally strong consignments. Among them are parts of the Leonard A. Lauder collection, including a Klimt portrait estimated at over USD 150 million, along with landscapes from his Austrian contemporaries each valued at USD 70–80 million.

Gustav Klimt, Portrait of Elisabeth Lederer (1914–16)

These are the kind of “headline lots” that the cautious market needs to shake off sluggishness and restore momentum at the high end. We have seen this before: the landmark Yves Saint Laurent and Pierre Bergé collection sale at Christie’s Paris in February 2009, which realized more than €373 million, became a turning point and a symbolic marker of recovery after the 2008 financial crisis.

All in all, despite—or thanks to—strong corrections, the market seems to be moving towards something more sustainable, and arguably healthier. It would have been foolish to hope that the art market would be a straight line upwards. Like any market, it is a dynamic, pulsing with cycles of acceleration, slowdown, and renewal. What we see today is the logical evolution after the excesses of the early 2020’s: a market that has shrunk in some areas, restructured in others, and become more selective. It is not “dead”; it is more disciplined. For collectors and advisors, that means being patient, privileging scholarship and curation, and rethinking financing and exit assumptions built during the low-rate era. The liquidity that once smoothed transactions is no longer a given—but the cultural and financial value of the strongest works remains.