Art market sales decline by 6% during the initial half of 2025, as per ArtTactic report
In the first half of 2025, the art market at major auction houses like Phillips, Sotheby's, and Christie's has seen significant reliance on third-party guarantees. These guarantees have become crucial in managing market risks, especially during challenging economic times.
## Impact of Guarantees on Art Sales
The use of third-party guarantees has reached record levels, with coverage at Modern and Contemporary evening sales in New York at an all-time high of 73%. This trend indicates a shift towards pre-arranged sales, making the auctions more predictable and reducing risks for sellers.
Guarantees help maintain market stability by ensuring that high-profile artworks meet their estimated prices. For instance, the Leonard & Louise Riggio sale, which was 99% backed by third-party guarantees, resulted in a successful sale of $489 million.
The reliance on guarantees reflects buyers' cautiousness amid economic uncertainty. High-quality artworks are still selling, but pricing must be conservative to attract bidders. Guarantees mitigate some of this risk by providing a floor price.
In addition to guarantees, auction houses are increasingly focusing on private sales. Christie's and Sotheby's reported significant increases in private sales last year, as collectors prefer these over public auctions to avoid market volatility.
## Specific Auction Houses
The Alberto Giacometti bust at Sotheby's, which failed to sell at a $70 million estimate, highlights the risks of declining guarantees in a challenging market. While specifics about Christie's are limited, the trend of increased private sales applies across major auction houses, suggesting Christie's is also adapting to market conditions.
The search results do not provide specific details about Phillips in the first half of 2025, but it is likely that Phillips is also utilizing third-party guarantees given the broader market trends.
## Market Shifts
Dewar, the global head of private sales at Sotheby's, attributed the shifts in sales to greater confidence in buying and selling online over the last five years, prompted by the Covid-19 pandemic. Third-party guarantees accounted for 96% of the total guaranteed sales value and 90.7% of guaranteed lots sold for works in this category.
Online-only auctions experienced a 10% drop in value, but the number of lots sold through these platforms grew by 12.9%. Dewar noted a shift in emphasis on sales based in New York compared to auctions in other cities like Paris, London, or Hong Kong.
Evolving buyer engagement and growth "largely centred in major European cities" were observed in online-only auctions. There were big increases for design, decorative arts and furniture, up 20.4% to $172 million.
Sales of Old Masters rose by 35.6% to $171.2 million, and sales of impressionist and modern art fell by 7.7% to $989.5 million. However, a recent record-breaking sale of a Venice view by Canaletto for £31.9 million ($43.7 million) at Christie's Old Master's auction in London is an example of the success of guaranteed lots.
Dewar anticipates that guarantees will play a "really crucial role" in attracting consignments for the second half of the year.
Overall, the art market is adapting to economic challenges by leveraging third-party guarantees and shifting towards private sales, which indicate a more cautious and strategic approach to art purchasing. The overall auction sales at Christie's, Sotheby's, and Phillips for the first half of 2025 have fallen by 6.2% compared to the same time last year, and sales of post-war and contemporary art dropped by 19.3% to $1.22 billion. Sales of luxury goods were almost flat, down 0.5% to $805.9 million.
- The rising use of third-party guarantees in the art market, particularly in Modern and Contemporary evenings sales, has led to a shift towards pre-arranged sales, making auctions more predictable and reducing risks for sellers.
- Guarantees played a crucial role in ensuring the successful sale of high-profile artworks, such as the Leonard & Louise Riggio sale, which was 99% backed by third-party guarantees and generated a total of $489 million.
- The reliance on guarantees is a response to buyers' cautiousness in the face of economic uncertainty, as they help mitigate some of the risk by providing a floor price.
- In addition to guarantees, auction houses like Sotheby's and Christie's have reported significant increases in private sales, suggesting that collectors prefer these over public auctions to avoid market volatility.
