A little over two years ago, closing a deal was relatively simple and quick for gallerists trading in ultra-contemporary art. A collector came to a show or a fair, saw something they liked or was hot, and bought it, few questions asked. In today’s cooling market, the decision process is longer and more fraught, with plenty of time to bail out or head for the safer waters of more established post-war artists.
That’s the essence of the 2024 art market, according to the annual Art Basel and UBS Global Art Market Report, written by arts economist Clare McAndrew and released on Tuesday. Global sales contracted by 12 percent to $57.5 billion, marking the second consecutive year of decline after a post-pandemic euphoria propelled the market to $68.1 billion in 2022.
In the forward to the report, Christl Novakovic, head of UBS Global Wealth Management Europe, Middle East, and Asia, writes that “Despite challenges in certain sectors, the art market remains resilient. Easing inflation, stable stock markets, and lower interest rates, offer welcome developments.”
Clearly that section of the report was written before President Donald Trump’s global barrage of bewildering tariffs chewed through global markets over the last week. According to The Economist, the tariffs and the predictable retaliation they’ve inspired are “wreaking havoc” on the stock market, with the S&P 500 teetering on a bear market. The future, the Economist wrote, looks more grim than the “the worst periods after Lehman Brothers went bust in 2008 or any equivalent during the Covid-19 pandemic.”
Yet beneath the disappointing headline figures lurks a more nuanced reality, at least for the art market: the volume of transactions actually increased by 3 percent to 40.5 million last year, suggesting an art market reconfiguring itself rather than one in the middle of collapsing.
Let’s call it The Great Bifurcation. The top end of the market, which drove the recovery after COVID, has cooled dramatically. But there’s vitality and spark at more accessible price points. According to the report, sales of artworks exceeding $10 million at auction plummeted by 39 percent in 2024, following a 27 percent decline the previous year. These ultra-high-end works now represent just 18 percent of the market’s value, down from 33 percent in 2022. Meanwhile, the market for works under $50,000 has expanded both in value and volume.
This fork in the market could upend traditional power structures. Smaller galleries with annual turnover under $250,000 saw sales increase by 17 percent in 2024, while blue-chip dealers with turnover exceeding $10 million experienced a 9 percent decline.
While some might see in those figures a slow deteroriation of the overall market, McAndrew suggests that the market is instead rebalancing. After years of bottom lines driven by record-breaking prices, galleries are instead getting into the black and smaller deals, and lots of them.
(It should be noted that the Art Basel and UBS Survey of Global Collecting, which released last fall, and was also written by McAndrew, came to a similar conclusion.)
Contemporary Art Flounders
Perhaps most surprising is the relative underperformance of contemporary art, which for much of the recent past was the engine of market growth. Dealers specializing exclusively in this sector reported an 11 percent drop in sales, while those focused on older segments like Post-War, Modern, and even Old Masters fared considerably better.
At auction houses, the pattern was similar. Contemporary art sales declined by 36 percent to $1.4 billion, their lowest level in six years. Works created within the last two decades performed particularly poorly, with sales falling 43 percent year-on-year to $1.1 billion—just one-third of their 2021 peak.
As public sales slowed, discretion became de rigueur for high-value transactions. Private sales through auction houses increased by 14 percent to $4.4 billion, with Christie’s reporting a remarkable 41 percent surge in this channel. For Sotheby’s, private sales reached $1.4 billion, representing 23 percent of their business, up from 15 percent a year earlier.
After the pandemic-induced surge in online sales, the market appears to have found a new equilibrium between the digital and the physical. Online sales accounted for 18 percent of total market value in 2024, double the pre-pandemic share but stable year-on-year.
The composition of these digital sales has evolved significantly. Rather than third-party platforms, dealers have invested heavily in their own websites and digital infrastructure, which now generate 17 percent of their total revenue—more than double the 8 ercent recorded in 2019.
This shift reflects changing collector behavior. In a survey of high-net-worth individuals, 52 percent reported preferring to buy from dealers online without viewing works in person, compared to just 30 percent in 2023. Interestingly, gallery attendance has also increased, suggesting collectors are viewing exhibitions but completing purchases remotely.
The Cost Conundrum
Perhaps the most pressing challenge facing the trade is rapid cost inflation against a backdrop of declining sales. Operating expenses increased by approximately 10 percent across the sector in 2024, with particularly sharp rises in shipping (15 percent), art fair participation (16 percent), and travel (11 percent).
Art fairs remain crucial sales channels, accounting for 31 percent of dealer revenue (up 2 percent from 2023). However, the expense of participation has become increasingly prohibitive, especially for smaller galleries.
“Art fairs are becoming more and more influential,” one anonymous dealer said in the report. “However, rising expenses such as participation fees and shipping make it difficult to maintain a profitable pace.”
Another dealer put it a little more sharply. “The winner-takes-all economy bites in a downturn. Participation in even the best-reputed art fairs is currently too expensive for a small avant-garde gallery that is not an aristocrat’s plaything.”
Silver Linings
Despite these challenges, the report is far from a eulogy. Female artists are gaining ground, with primary market galleries reporting 46 percent female artist representation (up from 42 percent in 2022) and sales from female artists increasing to 42 percent of revenue. Dealers are also successfully reaching new audiences, with 44 percent of buyers in 2024 being new to their businesses.
So then, there’s a consensus that cautious optimism will prevail. One-third of dealers expect improving sales, while 47 percent anticipate some kind of stability. The auction side is more pessimistic, with only 15 percent forecasting growth. Most businesses plan to maintain current staffing levels, suggesting the trade is preparing for a period of consolidation rather than expansion.
As interest rates continue to fall and wealth creation accelerates among the ultra-wealthy, the fundamentals for recovery remain in place. However, the era of speculative buying appears to have yielded to a more measured, considered approach to collecting—one that may ultimately produce a healthier, if somewhat smaller, art market.
The biggest takeaway for me—based on conversations with dealers over the last year, and confirmed by the report—is that collectors are leaning into buying what they like, rather than focusing on investment returns or what is hot. While people may be shying away from six- or seven-figure purchases, a market with more transactions is a more stable and possibly more democratic one. It could be a less elitist market too, though that might compete with the art world’s inherent exclusivity.
What’s more certain is that galleries and dealers have to increasingly find new strategies to navigate the art market’s—and the wider economy’s—rapidly evolving landscape.
