Slowdown, slump, shakedown, stagnation. Call it what you will, the international art market is going through what many people in the industry feel is a consequential, perhaps seismic moment. For their May sales in New York, Sotheby’s, Christie’s and Phillips raised a combined total of $1.27bn from their marquee auctions of Modern and contemporary art, according to data compiled by the London-based auction analysts, Pi-eX. This figure, one of the few publicly available indicators of the health or otherwise of this opaque and secretive business, was down 8% on the total of the equivalent sales last May.
The work carrying the highest price tag this season, Alberto Giacometti’s 1955 bronze bust, Grande tête mince (Grande tête de Diego), estimated by Sotheby’s to sell for at least $70m, failed to attract a buyer. Andy Warhol’s 1967 Big Electric Chair, valued at at least $30m, was withdrawn just before Christie’s equivalent auction to avoid a similar fate.
In September last year, at the Art Business Conference in London, Christie’s then chief executive, Guillaume Cerutti, had been upbeat about prospects for the trade, pointing out that downturns in the 21st-century art market had never lasted for more than two years. Several months on, amid the geopolitical mayhem of a second Donald Trump presidency, 2025 looks likely to be the third year in a row that sales in the global art market have contracted.
“The anticipated ‘Trump bump’ has ultimately given way to a ‘Trump slump’,” says Christine Bourron, the chief executive of Pi-eX. “Trump’s ‘Liberation Day’ announcement introduced significant geopolitical uncertainty, casting a shadow over the global economy and unsettling buyer confidence in the art market,” she adds, referring to the barrage of proposed tariffs on imported goods from more than 60 countries that Trump unveiled on 2 April, six weeks before those bellwether New York auctions. (Four weeks later, the US National Guard was on the streets of Los Angeles, quelling riots.)
The optics of those New York sales might have been rosier if Sotheby’s had managed to get that Giacometti bronze away. The sculpture was being sold by the Soloviev Foundation, an entity created by Stefan Soloviev, the son of the late New York collector and property magnate Sheldon Solow, who was renowned for making tough deals with auction houses. Rather than accept a guaranteed sale, Soloviev opted, as his father might well have done, for a more lucrative “enhanced hammer” package that would have entitled him to a sizeable share of Sotheby’s fees if the lot sold. But the $70m price tag proved far too ambitious at a time of geopolitical jitters and falling values for many supposed “blue-chip” works by Modernist and classic contemporary masters.
Market ‘sea change’
“Art has become too expensive, and the number of people prepared to pay astronomical prices for C-quality, let alone A-quality, art is getting smaller,” says Clayton Press, a New Jersey-based collector, art adviser and long-time lecturer at New York University. “It’s a sea change. It’s a very dramatic upheaval in the market that in many respects was long overdue.”
The art world, particularly the contemporary one, has over the past few decades attracted billions of dollars of spending from a small but prominent cohort of the world’s wealthiest individuals. As a result, the top end of the international art trade, consciously or not, has tended to regard itself as a hyper-luxury boutique business relatively impervious to the vicissitudes of the wider world. But now that confidence is being buffeted by wars, political and economic volatility, as well as seismic technological, generational and cultural shifts.
“Everybody needs to change the business model,” said the contemporary gallerist Massimo De Carlo, speaking at the Art for Tomorrow conference in his native Milan in May. De Carlo had just exhibited at what several dealers reported to be a less than buoyant edition of the Tefaf New York fair.
“The real problem is that the entire art-world system accepted a narration that was not our narration. In the 1980s and particularly the 90s that narration was made by finance, by economics. To buy art was a good deal, an investment. People bought art because they wanted to be part of the deal,” said De Carlo, who pointed out that the catch of this deal was that investing in art involved risk. The art world needed “a new narration”, De Carlo added; as yet, being “in the moment”, he was not sure what that was.
The rising average age of buyers at fairs such as Art Basel will impact the market
Photo: David Owens
The art market’s continuing risks for the investment minded were clear to see at De Carlo’s elegant new gallery in a 1930s townhouse in Milan, where he was showing new, psychedelically-pigmented paintings and sculptures by the Los Angeles-based artist Jennifer Guidi. Back in 2021, when the art market was frothing with speculative investment, Guidi’s abstract sand paintings were among the flavours of the moment, being resold at auction for as much as $625,000. According to Artprice, Guidi’s top auction price last year was $200,000. Yet in Milan, gallery prices for her large paintings were pitched at double that figure and higher.
“People are buying, but pricing is the key. We’re in a price-sensitive market,” says Drew Watson, the head of art services at Bank of America. “The art market got heated up post-pandemic, along with the stock market. It was a time of low interest rates, which drove capital towards art. It was also a time of intense competition for ultra-contemporary art,” Watson adds. “That’s shifted now.”
Formidable structural challenges
Some buyers continue to be very sensitive about the prices of ultra-contemporary art. In June, the aggressively acquisitive Chinese “speculector” Ding Yixiao, known as Xiao, offered numerous works from his collection for sale on Instagram at massively discounted rates. In a post on the social media platform , he raged that people were “tired of buying from galleries because of the fucking package deal and fucking non-resale. And auction house taking the fucking 26% commission and fucking expensive shipping fee all the time.”
Both De Carlo and Watson, along with many others involved in the trade, maintain that there are still plenty of people who want to buy art but who are simply holding fire in the current febrile environment. But aside from specific issues like high pricing, high interest rates and the uncertainty surrounding tariffs, the art trade is a business that faces formidable structural challenges.
The core client base of the international art market, seasoned collectors and investors who have been buying at galleries, fairs and auctions for decades, is ageing. It is far from certain that they will be replenished by enough buyers from younger generations. To be sure, it has been estimated that over the next decade as much as $70 trillion could be passed down to Millennials, Gen Zers and Gen Xers during the Great Wealth Transfer. But how many of them will want to pay tens of millions for works by the sort of dead, white, male artists their parents collected? How many of them will want to buy works by the planet’s ever-expanding population of contemporary artists?
“There are too many artists, too few collectors and too little demand,” Press says. “The galleries are continuing to push high-value product. It’s partly the result of having high overheads. Who knows what discounts are being offered,” he adds. “There’s a certain sense of sameness about it all.”
It has become a hackneyed commonplace of sociological research—and articles on the art market—that individuals aged under 45 are more interested in spending money on experiences than possessions. For them, memories are made at Glastonbury or on an Airbnb minibreak in Lisbon, rather than visiting a gallery or art fair. Their most precious possession is a smartphone.
Watson does not see an art market resurgence any time soon. “It’s going to take a little bit of time to rebuild, coming off the highs of 2021 and 2022. We’ll find out what the new law of the market is, and gradually build it from there,” he says.
The old law, to quote America’s most powerful and disruptive non-collector, was the art of the deal. If prices come down enough, maybe the new law will be more about the art.