From the January 2025 issue of Apollo. Preview and subscribe here.
There was optimism at the start of 2024 that the art market would be better than it was in 2023 – when fine art sales dropped at Sotheby’s, Christie’s and Phillips by nearly 20 per cent, and Simon Lee in London and Foxy Production in New York were among a number of gallery closures.
But by December it was clear that 2024 had been, if anything, worse. Auction sales by July were down by a further 27 per cent, while November’s fine art evening sales in New York – one of the most important barometers of the market – were lower by $654m (hammer value excluding fees).
The toll on galleries continued: Mitchell-Innes & Nash and Alexander and Bonin in New York were among the casualties. The art world was further shaken by the announcement in April of the closure of the 80-year-old Marlborough Gallery, representative of post-war titans such as Frank Auerbach and Francis Bacon, although this appeared to be the result of management disputes rather than faltering cash flow.
Why the art market should suffer when the economy and stocks are doing well is a matter of debate. Some blame high interest rates, making it more expensive for collectors to borrow to buy art (a surprisingly common practice) and easier to make money in other ways. Others claim that a much-discussed generational shift is under way. Older collectors, they say, are divesting themselves of expensive, but not masterpiece, Impressionist and modern works while younger buyers prefer less pricey, contemporary artists.
There were bright spots – a buzzy summer London Gallery Weekend in June, the first edition of Art Basel Paris in the spectacular Grand Palais in October, and record sales for artists including Magritte and Ed Ruscha in November in New York.
Lindsay Dewar, head of analystics at research firm ArtTactic, believes that 2025 will be more positive: ‘The New York auctions suggest that we have already hit the bottom and are on the way back up. It won’t be monumental growth, but there’s more confidence – especially for good works by artists that everyone has heard of.’
Many agree, especially after good sales at Art Basel Miami Beach last month. But collector Adam Lindemann, writing for Artnet, noted that when he worked on Wall Street ‘we were taught to “never catch a falling knife”. There is no reason to think that the prices of our art market darlings have bottomed,’ he wrote, while admitting he is a ‘contrarian’.
In 2025 many questions remain – from the future of Frieze art fairs (their owner, US media conglomerate Endeavor, put the group up for sale in the autumn) to the wisdom of the big auction houses’ focus on luxury, some claim to the detriment of fine art.
Tariff-happy Trump
Donald Trump has no discernible interest in art – but that doesn’t mean he won’t affect the market. The 1031 tax break – which allows capital gains tax to be deferred almost indefinitely, so long as the proceeds of the sale of one asset are used to buy another of the same kind – was seen as a major driver of the US market. During his last presidency, Trump got rid of it for art but left its equivalent for property intact.
How his plans on tariffs, migration, tax and deregulation will affect the art world this time around is unclear. The first big risk factor is his stance on tariffs, variously threatening 10 per cent to 20 per cent taxes on all imported goods according to UBS Global Wealth Management’s chief economist, Paul Donovan. He says that tariffs could be as high as 30 per cent on Chinese goods and warns that ‘the European automotive sector has a target on its back’. However, Donovan says, ‘We don’t believe that the president-elect will do everything he says he will, so we suspect there will be no universal import tariff.’ The art market will be hoping he is right: in 2023, art imports into the United States for sale totalled $10.4bn.
More problematic is Trump’s plan to deport up to 11 million illegal migrants, at an estimated cost of $150bn. ‘A mass deportation of illegal migrants would be extraordinarily disruptive and push the US into a very weak growth position,’ Donovan says.
Many in the cultural sector are hoping policies like these are bluster. ‘Trump has inherited a very good economy and is likely to continue a business-friendly environment which is good for the art market and cultural philanthropy,’ says András Szántó, a New York-based museum consultant. Wealth advisers point out that the US economy usually grows strongly when one party, regardless of allegiance, holds the presidency, Senate and House of Representatives at the same time.
‘Any exercise in crystal ball gazing is futile not only because Trump is erratic but because the external situation is unpredictable,’ Szántó says. ‘Who knows what he will be preoccupied with – trade wars, maybe real wars.’
Regulation-happy EU
More certain to have an impact on the art market is the European Union’s 2019 regulation on the import of cultural goods, which steps up a gear in June this year.
A reaction to fears of looting of antiquities from war-torn countries such as Syria, the legislation has expanded to cover all manner of objects: paintings, sculpture, fossils and decorative art more than 200 years old made outside Europe. Anyone wanting to import art into the EU will now have to show detailed provenance (in the past, it was up to the authorities to prove something was dubious). Suffice to say, many older objects have patchy documentation.
France and Belgium are the centres of the art trade in African objects, while the most important fair for historic works of art, antiquities and Chinese works is TEFAF, based in the Netherlands.
Katalin Andreides, founder of Andreides Law, says the regulation is ‘a huge problem, it’s creating enormous uncertainties in the market – and the EU’s plans to introduce “a centralised electronic system” to monitor the objects and their movements seems extremely complicated.’
Others say the sheer hassle, including the risk of goods being held for investigation at customs – missing scheduled fairs and auctions – and the threat of criminal action if dealers make misleading statements will finish the European trade in some fields, Asian art particularly.
Whether this is good for other markets, such as London, remains to be seen. ‘One school of thought is that it is a competitive situation and the EU is shooting itself in the foot,’ says Till Vere-Hodge, a partner specialising in art at the law firm Payne Hicks Beach. ‘But if you are a dealer in London, you are probably more concerned about the size of the market you can sell to.’
London is relatively highly regulated compared with other global art market hubs. The real beneficiaries could be more ‘laissez-faire’ markets in the Middle and Far East.
Installation view of Sougwen Chung’s booth, in collaboration with HOFA Gallery, at Art Dubai in 2024. Photo: Cedric Ribero for Getty Images; © the artist
Market-happy Middle East
Several of the Gulf states are doing well already, without inadvertent help from the EU, with the UAE, Qatar and Saudi Arabia all benefiting from billions of government investment in biennials and building art museums.
Dubai is the centre of the region’s art market, with more than 40 commercial art galleries – and it is booming. According to Benedetta Ghione, executive director of Art Dubai, the region’s leading fair, ‘People are now really grasping the extent and the breadth of the developments in the Gulf.’ The fair’s 18th edition will open in April, while the longawaited Guggenheim Abu Dhabi and the rest of the massive Saadiyat Cultural District are scheduled for completion by the end of the year.
With a rich government eager to diversify beyond oil, the UAE has made itself extraordinarily attractive to the world’s wealthy. It is estimated to have more than 116,000 millionaires in a population of some 9.5 million. Nearly 7,000 moved there in 2024 according to wealth management and relocation specialists Henley & Partners. The lack of income and wealth taxes, and low business taxes, are likely to increase the UAE’s appeal as governments around the developed world raise taxes.
Thousands of rich Russians have also fled there from Vladimir Putin’s regime and the war in Ukraine. Unlike the UK, EU and United States, none of the Gulf states has imposed sanctions on them, making it easy to buy property, luxury goods – and art.
Interest in the region’s art market exploded with the news last autumn that Abu Dhabi’s sovereign wealth fund has taken a stake in Sotheby’s as part of a $1bn cash injection. Rumours are circulating (unconfirmed as we went to press) that Swiss fair organiser MCH is in talks with the Abu Dhabi Art Fair. No one will be surprised if MCH’s principal fair brand – Art Basel – follows the money.
Documenta in dire straits
On 18 December 2024 Naomi Beckwith, chief curator and deputy director of the Guggenheim in New York, was announced as artistic director of Documenta 16 to be held in 2027. The head of this five-yearly, $40m-plus, ultra-high profile exhibition in Kassel, Germany, usually has at least four years to plan and stage it – but the appointment has been held up by a series of rows that many thought could finish this 70 year-old institution. Can Beckwith salvage Documenta with only two and a half years to go?
Documenta may have less weight in the art market than biennials such as Venice, but in the curatorial world it is arguably the most important. But since 2017 it has been buffeted by one scandal after another, as well as the sort of rows about curatorial direction that have rarely affected Venice.
Documenta was founded in the blitzed city of Kassel in 1955 by the architect, curator, artist and academic Arnold Bode. The first edition presented works in the ruins of the Museum Fridericianum. Its stature has since grown: the 1982 edition was credited with presaging the resurgence of painting and sculpture after years of conceptual art. The 2002 edition launched the career of the late curator Okwui Enwezor and many non-Western artists: the effects of its presentation of a vastly more diverse and globalised art world can still be felt.
But now its future hangs in the balance. Trouble began in 2017 when Adam Szymczyk’s difficult, ambitious critique of neoliberalism, staged in both Athens and Kassel, went more than €7m over budget. (It is the subject of a 14-hour documentary doing the rounds of the international film festivals.)
The 2022 edition, organised by several artist collectives under the loose direction of Indonesian artist group Ruangrupa, imploded as it opened. Antisemitic imagery was detected in some of the work; Ruangrupa and several artists in turn accused their critics of racism. At the end of 2023 the committee set up to choose a curator for 2027 resigned after one member was accused of antisemitism for supporting the BDS movement. The committee retaliated, criticising the German media and government for racism, censorship and failing to distinguish between antisemitism and opposition to the Israeli state.
Beckwith is best known for large monographic exhibitions (she is currently working on a show devoted to Rashid Johnson) rather than biennials, but her museum experience might help her navigate political tensions. Because the situation in Germany – and the art world at large – is inflammatory: many leading artists are at loggerheads with the stance of German institutions and authorities over Palestine, and the devastation of Gaza has made the situation worse.
Installation view of The Wall of Puppets (2022) by Yaya Coulibaly at Documenta 15 in 2022. Photo: Maja Wirkus; © the artist
The art market tends to be concentrated on a small number of artists – some estimates suggest that just 10 artists, led by Jean-Michel Basquiat, account for a quarter of the global contemporary art market at auction. But it is events such as Documenta, however patchy and infuriating they may be, that show new directions in art, sometimes for years to come. Its fate may not be uppermost in everyone’s thoughts – but perhaps it should be.
From the January 2025 issue of Apollo. Preview and subscribe here.
This article was updated on 19 December 2024 after the announcement of Naomi Beckwith as artistic director of Documenta.