UPS and Downs by Kaws, estimated 30,000 at £ 50,000, exhibited during an overview of the Phillips exhibition hall, in the center of London, before their next auction of Evening Edition auction. Image date: Friday January 17, 2025. (Photo by Ian West / PA Images via Getty Images)
Ian West – PA Images | Images pa | Getty images
A version of this article appeared for the first time in Inside Wealth Newsletter of CNBC with Robert Frank, a weekly guide to the investor and consumer with high shuttle. Register To receive future editions, directly in your reception box.
Auctions have decreased for the third consecutive year, as dealers, auctioneers and collectors reflect on a deeper crisis on the art market.
Auction for the first half of the year at Sotheby’s, Christie’s and Phillips fell to 3.98 billion dollars, a drop of 6% compared to the same period in 2024, according to Arttactic. The total auction is the lowest in at least a decade (reserving the pandemic of 2020) and is now down 44% – or more than $ 3 billion – from 2022. The decreases follow a drop of 19% in 2023 and 26% down in 2024.
The post-war and contemporary art, which has been the main engine of art auction in recent decades, has dropped 19% even larger in the first half, according to Artactic.
“Persistent concerns about global economic growth, current inflation and the increase in geopolitical tensions weigh confidence and create a more prudent investment climate,” said Arttactic. “These factors are likely to question the market momentum during the second half, because the industry adapts to a still determined global landscape.”
These persistent concerns, however, are not presented in other areas of the economy of wealth. The prosperity of the rich is at record levels, the highest 10% of the Americans adding 37 billions of dollars to their wealth from Cavid, marking an increase of 45%. The stock markets increased by more than 20% in 2023 and 2024 and are again up until now in 2025. Housing values and commercial assessments have also skyrocketed, adding to personal wealth.
The professor of Yale William Goetzmann studied the relationship between art prices and financial wealth by going back over 300 years and found that they were “very correlated”.
“The request for art increases with the richness of art collectors”, he wrote in his famous article “taking into account the taste, art and financial markets over three centuries”.
With personal wealth to peaks of all time, Goetzmann said that the correlation of 300 years was broken. He said that there is one of the two explanations of the divergence: either the drop in the art market is a temporary aberration and will rebound this year or the next, where the art market is going through a more structural change.
“The question is whether there is a kind of fundamental gap in relation to the social standard of the very rich being very involved in the collection of art at the highest prices and levels,” he said. “We don’t know yet.”
This fundamental deviation, if this happens, can be rooted in the generational change of wealth. For decades, the art market has been largely motivated by baby boomers who have built large art collections as their wealth has increased throughout the 80s, 90s and 2000s. Many of these baby-boomers collectors are now buying less or reduction of the workforce. And an increasing number leaves successions with large collections for sale, because their children often do not want art.
At the same time, the new generation of rich – Millennials and Gen Z – has grown in a more digital world and may not have the same tastes or the same interests for the paintings of the 20th century artists. With more than 100 billions of dollars in wealth that should mainly pass baby boomers to the next generation, some experts say that the art market could show signs of structural change and a more existential crisis.
Auction houses run to adapt with more online sales, luxury items and low -cost offers. Auction sales in the luxury category – including jewelry, handbags, wine, watches and sports memories – increased by 1% in the first half, even if art sales have decreased, according to Artactic.
The jewelry shines particularly brilliant among young collectors while more wealth move to women. Sales of jewelry and jewelry jumped 68% in the first half compared to a year ago. Online auctions also gain quickly compared to physical auctions, because young collectors prefer to tend to tender their phones.
Total auction sales at Christie’s were stable in the first half, thanks largely to online sales and luxury sales. Its luxury sales, which also included conventional cars, jumped from 29% to $ 468 million. Among the strengths: the Diamond Rose Marie-Therese, would have belonged to Marie Antoinette, who sold $ 14 million, and the Blue Fancy Blue “Blue Belle” diamond cost $ 11 million.
The shine of jewelry and luxury products also helps Sotheby’s, which sold its own blue diamond, the famous “Mediterranean blue”, for $ 21.5 million in May after a ferocious auction war.
The younger collectors lead to a high demand for collectibles at a price of less than $ 100,000, the most competitive auctions for the work of less than $ 50,000. The upper art market market, with prizes at the price of more than $ 10 million, plunged 39% last year, while sales of works for less than $ 5,000 jumped by 13%, according to the Art Basel and UBS Global Art Market report.
Bonnie Brennan, CEO of Christie’s, told journalists that the main mission of the auction house was to offer the objects that its customers want today and to offer them at the right price – especially for the new generation of collectors. Completely 80% of its offers this year were online and almost a third of the winning offers came from millennium or generation Z buyers.
“We show great relevance for the young generation, for millennials, for generation Z,” said Brennan. “It is something that is really essential to maintain our business in the future.”