The Art Market Check by Melanie Gerlis

There’s no such thing as a quiet moment for the art market. Having ended 2025 on a relative high, macro events swiftly changed the narrative, while the industry continues to grapple with some of its own particular challenges.

A bumper season of auctions in New York at the end of last year crowned a strong second half performance. This meant that, after two years of decline, the art market as a whole grew by 4% to total sales of USD 59.6bn, according to the Art Basel & UBS Art Market Report, published this month. Nonetheless, experts urged caution.

Dr. Clare McAndrew, founder of Arts Economics and the report’s author, says that the topline numbers mask many nuances, noting that just a few, high value works at auction really made the difference last year. While these were welcomed, the overall picture was “more of a mix,” she says.

McAndrew identifies some “red flags” for the market, mostly around national protectionism, in the form of tariffs and other regulation, which is “fine for strong domestic markets, such as the US and [Mainland] China,” but less so for regions that are more reliant on cross-border activity, including the UK.

Nonetheless, come the start of 2026, the market seemed in a stable state. Additional activity from events such as the new Art Basel Qatar fair, held in Doha in early February, seemed to herald the welcome opening of a relatively untapped region. “Art Basel comes with a lot of equity, trust and legitimacy and will help reduce barriers of entry to the art market,” said Mohammed Hafiz, co-founder of Saudi Arabia’s ATHR gallery.

Fast-forward just a few weeks, a war splintered through the region. While the initial reaction was limited within the art market—London’s auction season in the week of 2 March proved much stronger than the previous year—the subsequent economic impact, on the back of Iran’s stranglehold of oil exports, looks likely to take its toll.

“There is a real danger that, depending on how long it continues and how it ends, this conflict could weaken the recovery seen in the global art market over the past six months,” says Anders Petterson, founder and CEO of the analysis firm ArtTactic.

The war’s immediate impact was most evident within the region. The Art Dubai fair, due to mark its 20th anniversary edition mid-April and under its new director Dunja Gottweis, decided to postpone until May, by which time an “adapted” version is planned. Most likely, this means a more locally-focused event, given logistical issues such as airlines suspending flights to the Middle East for the medium term—should it go ahead at all. Galleries on the ground are hopeful. “We will find a way to make it happen,” says Kourosh Nouri, founding director of Dubai’s Carbon 12.

Elsewhere in the world, it has mostly been business as usual so far, albeit at the market’s now more measured pace. At the VIP opening of this year’s Art Basel Hong Kong fair on 25 March “the fair wrapped up with strong momentum,” says Amy Lo, UBS chairman of Global Wealth Management Asia, Head and Chief Executive of UBS Hong Kong.

She noted a dominant Asia-Pacific presence—"the centre of gravity this year clearly feels closer to the region”—from whom exhibiting galleries reported healthy demand. “Sales on opening day were strong,” said the international gallerist David Zwirner. For him, these ranged from symbol-laden paintings by Walter Price (who had a coinciding show at the Hong Kong space) priced up to USD 90,000 to turn-of-this-century paintings by the Beijing-born Liu Ye and South Africa’s Marlene Dumas for over USD 3m each. Even more importantly, Zwirner says, “we saw a high number of new collectors. A new generation is entering the Asian art market.”

There was marked improvement too at the coinciding auction season in town. Totals at Christie’s evening sale were up 17% on the equivalent sale last year, while Sotheby’s improved by 60%. The season was topped by Joan Mitchell’s two-part, vivid “La Grande Vallée” (1983), which sold for a HKD137.3m (all prices including fees) at Sotheby’s, making it the most valuable works by a female artist to sell in Hong Kong.

Above-estimate sales were made for artists ranging from the South Korean living artist Lee Bae, who makes work only in black, to Vincent van Gogh and the modern master Sanyu, known as the “Chinese Matisse”. There were signs though that certain artists have hit their peak. At Sotheby’s sale, the trademark “Bloodline: Yellow Baby Girl” (1996) by the once in-demand Chinese painter Zhang Xiaogong sold for HKD3.8m, far below its previous selling price of HKD9.8m in 2011.

Looking ahead, healthy consignments are already in the bag for New York’s important May auction season, including from estate sales that remain a boon to the market.

Christie’s has works from the New York patron and philanthropist Agnes Gund, who died in September, including Mark Rothko’s late, dark “No.15 (Two Greens and Red Stripe)” from 1964, which has an unpublished estimate of around USD 80mn. Another Rothko, with even more wall power—his “Brown and Blacks in Reds” (1957)—will be at Sotheby’s with an estimate in excess of USD 130mn, this time from estate of the collector and dealer Robert Mnuchin.

Nonetheless, all market players are aware that relying on trophy sales is risky, particularly in view of a future generation that is demonstrating a change of taste. Flexibility continues to be the name of the game when it comes to the art on offer. The Hong Kong ‘Modern & Contemporary’ evening auctions presented a very different mix to the usual 20th and 21st century fare, notably at Sotheby’s, which incorporated Ming-to-Qing Dynasty (17th-century) scholar’s rocks, Joseon period (18th-century) moon jars and even 13th-century tracery sections from the nave of the UK’s York Cathedral. Christie’s scored a hit with the 17th-century Dutch naturalist painter Johannes Goedaert, whose Asia-friendly “Flowers in a Chinese porcelain vase…” sold for HKD10.2m, above a pre-sale estimate of HKD3.5m-5.5m.

“Today's collectors — particularly in Asia — no longer think in categories. They think in quality. When we feature antiquities alongside modern and contemporary works in our Hong Kong evening sale, it reflects how collecting is evolving,” says Evelyn Lin, Sotheby’s chairman of Modern & Contemporary Art, Asia.

UBS’s Lo identified a similar dynamic at Art Basel Hong Kong, this year fielding its first iteration of the Zero 10 section for digital art. “There is a noticeable openness to experimentation, particularly in cross‑media practices, large‑scale installations, and works that sit between contemporary and historical narratives,” she says.

Meanwhile, for art galleries around the world, a positive finding of this year’s Art Basel & UBS Art Market Report was that, despite headlines suggesting otherwise, art businesses openings far outweighed closures during 2025. The share of gallery openings was found to account for 42% the newsflow, versus 25% of closures.

Among those that did close though were some respected and long-standing businesses, notably Sperone Westwater (after 50 years of operation); Blum Gallery (30 years) and Clearing (14 years). The subsequent revelation in early February that Stephen Friedman had gone into administration, after 30 years of business, and with artists including Yinka Shonibare and Kehinde Wiley, shocked the trade. There were also plenty of “restructurings”, the report notes, including galleries reducing their overseas locations—and often doubling down regionally—suggesting a more fundamental reshaping of the industry.

Assessing the dynamics in the report, Art Basel CEO Noah Horawitz sums up the market’s status quo. “On balance, this year’s data points to something more consequential than a return to growth. It reflects a sector adjusting to new economic realities, refining its models, and strengthening its foundations for the long term.”