Overstone 2025 Outlook
Victoria Kleiner, Head of Art Due Diligence and Digital Art Expertise
Tarabella Frazer, Research Associate and Client Success Manager
Christopher Mann, MSc CEng MIET MIoP, Head of Data
How Presidential elections affect the art market
Effect of U.S. Elections on the Art Market (Overstone Analytics)[1]
The plot above shows a correlation between the occurrence of the U.S. Presidential and Midterm elections, and the rises and falls in the art market (Total Sales USD). This can be a result of uncertainty and certainty, feeling and sentiment prior to and after the elections, as participants in the art world decide whether the time is right to buy and/or sell according to political and economic conditions prior to and after the elections.
We see a boost in total sales after Trump's first election win. The rise relates to increased certainty of the political situation and that policies benefiting UHNWIs would be favoured and more likely to be introduced.
We see a drop in sales volume about 6 months before the 2018 midterm elections, correlating to uncertainty of what the outcome would be. The House of Representatives (HoR) was won by the Democrats, splitting the Senate and HoR which previously were both Republican.
Covid starts and caused major uncertainty and sales were stalled for the latter half of Q1 and the majority of Q2 2020. Sales increased in Q3 once the auction houses invested heavily in their online auction technology and started conducting remote live sales across their different locations, and collectors became more comfortable buying online.
There is another boost to the sales volume when Biden takes office, likely to be the result of further certainty about the political situation.
Prior to the 2022 midterm election, the sales volume starts to decrease, similarly to the 2018 midterm election. This time, the Republicans take the HoR and the Senate goes to the Democrats. As per 2018, total sales continue to decrease following the change to the HoR.
A key pattern in both mid-term elections is that the HoR is taken by the opposing party to the president. Most economics bills are raised in the HoR but need to be signed by the President. When they're split between parties, there is less certainty about what bills will get passed, correlating with the downward trend of sales totals in the art market.
The following graph highlights the average sale totals 12 months before and after each event. The black error bars indicate the amount of variation of the data over each period. As visible below, the presidential elections have historically had a positive effect on the art market, as average total sales increased following the 2016 and 2020 presidential elections. Both midterm elections exhibit a decrease in sale totals in the 12-month period following the event, aligning with the decrease in the total sales in the graph above and the uncertainty caused by the change to the HoR.
The Covid-19 Pandemic and the Ukraine War both saw increases to the average sale total in the 12 months following the start of the events, however the increases can be attributed to the strong sales succeeding each event and the strong market rebound following the initial stalling in the early months of the pandemic in 2020. Notably, the growth in average sale totals following the Ukraine War can largely be attributed to the Paul G. Allen sale in November 2022, which raised 1.5 billion USD.
Average Total Sales Over 12 Months Before and After Key Events (Overstone Analytics)
So, all else equal, we would expect to see a further boost in sales in Q1 this year following Trump's election. However, given the recent shock executive orders, we await the closing of the major sales over the next few months to see if the boost to the art market materialises.
Currently, the Presidency, HoR and Senate are all held by the Republicans. So, in November 2026 when the next midterm elections are held, we would expect to see a drop in total sales if the Democrats take the HoR (again, other factors or economic shocks notwithstanding). The average total sale after the 2026 midterm election is harder to predict, but political and economic stability, and quality works and single-owner collections coming to auction are important contributing factors to higher average total sales.
Shrinking of the top end of the market and strengthening of the lower end of the market
As detailed in the graph below,[2] the mean hammer price trend shows the contraction of the market following the highs of 2021 and 2022. It is lower in 2024 than in 2023, however the drop is not as sharp as the decline from 2022 to 2023. Furthermore, the total lots volume dropped in 2024, aligning with the reported ‘supply’ issue at the top end of the market, as some sellers are hesitating to consign works for auction.
Despite the lowered mean hammer price in 2024, the market felt positive and appears to be beginning to show signs of an upturn in the latter half of the year. This is visible in increase of the sales total for the latter half of 2024 in the graph ‘Effect of U.S. elections on the art market’.
Mean Hammer Price Average (USD) and Total Lots by Year (Overstone Analytics)
Third party guarantee (TPG) lots are a regular feature of marquee sales and can be a leading indicator of the top market. The number of TPG made in all November Sales dropped by 6%, from 146 in 2023 to 137 in 2024 and the average realised price dropped by 37%, from approximately 4.9 million USD to approximately 3 million USD.[3]
Analysis of TPG by medium segments suggests third parties are starting to guarantee more lower value lots than previously. As visible in the graph below, the ‘Paintings’ category has reduced, although the categories of ‘Works on Paper’ (WOP) and ‘Sculpture’ have grown in number. The number of guarantees is low in comparison to the ‘Paintings’ category, however the two categories buck the trend of decreasing TPG numbers and WOP has the largest year-on-year growth of number of TPG.
Sculptures vary in price according to the work itself, however WOP are an inherently lower value category, made clear when considering the average realised price of all WOP (guaranteed and non-guaranteed) was approximately 470,000 USD, whereas Paintings (guaranteed and non-guaranteed) was approximately 814,000 USD in November 2024.
Number of Third Party Guarantees by Medium in November 2023 and November 2024 (Overstone Analytics)
We can further see this increase to lower value lots when analysing different low estimate price segments of TPG lots, as the number of TPG increased year-on-year for all price segments, except for the top segment which decreased.
Number of Third Party Guarantees by Low Estimate Price Segments in November 2023 and November 2024 (Overstone Analytics)
It has been reported that the top of the market has shrunk, underscored by the year-on-year reduction of TPG works with a low estimate above 1 million USD (visible in the graph above).
Furthermore, the number of trophy lots coming to auction has decreased, with the number of lots reaching nine-figure sums appearing in 2024 decreasing to one (René Magritte’s L'empire des lumières selling for a record 121 million USD in November 2024) from six in 2022.
Lots in lower price segments, either due to their medium or actual value, are increasing in volume as more auction houses use them to increase their bottom line whilst the top end is not performing like the market high in 2022.
Analysing third party guarantees by location shows growth in Hong Kong, and a decrease in London and New York. It is of no surprise that the number of TPG lots is highest in New York, given that U.S. holds the largest market share of 42% in terms of value.[4] However, the number of TPG lots doubled year-on-year in Hong Kong from 7 to 14 lots, whereas New York saw a 10% year-on-year decrease from 134 to 121 lots, as visible in the graph below.
Number of Third Party Guarantees by Location in November 2023 and November 2024 (Overstone Analytics)
Furthermore, the average low estimate of TPG lots increased in Hong Kong by 28% year-on-year from approximately 2.4 million USD to 3 million USD, whereas London and New York saw a reduction of 3% and 44% year-on-year respectively. Although New York saw a reduction in the number of TPG lots, the decrease in the average low estimate could further indicate the trend that more lower value lots are being guaranteed.
Average Low Estimate of Third Party Guarantees by Location in November 2023 and November 2024 (Overstone Analytics)
The increase in the number and average low estimate of TPG lots in Hong Kong could indicate a tactic by the auction houses to present a strong sale with higher value lots, demand, and a positive outlook for the market. Christie’s and Sotheby’s opened new saleroom locations in Hong Kong with much publicity and reported successful inaugural sales at these new venues in September and November respectively.
In their 2024 review press conference, Sotheby’s reported Asia and Hong Kong as the most active region for bidding and the largest number of younger collectors active in the market, indicating that we can expect to see further sales, more buyers and guarantors in the future from this region.
Billionaire Outlook
There has been growth across all 3 regions of Americas, EMEA and APAC from 2023 to 2024. Growth can be expected in the MEA region, as the region has been ‘attracting the most billionaire capital.’[5]
The Global Art Market Share is likely to stay roughly the same in 2025 – the U.S. will hold the majority, then China, then UK, then EU and other regions. Although, we are likely to see growth of art market and other collector categories in China (Reuters reported that China’s Q4 growth beat market forecasts), EU and the Middle East thanks to the investment into new venues by Sotheby’s (Paris and Hong Kong) and Christie’s (Hong Kong) and both house’s expansion into Saudi Arabia.
Non-Fine Art Categories – growth of luxury (across different auction houses) and cross-selling into fine art
Heritage auctions has recorded their fourth consecutive record-breaking year – 1.867 billion USD in 2024. The Sports, Entertainment and Comic & Comic Art are some of their leading categories. They reportedly held the most successful Sports auction of any auction house in 2024.
Their drivers of growth include their global locations and categories, which in turn increase their pool of collectors, including the younger generations.
Sotheby’s report their luxury segment as comprising 37% of their total sales and worth 2 billion USD. Sotheby’s is expanding its luxury categories, with more and more auctions dedicated to the non-Fine Art categories, including watches, jewellery, wine, cars, sports jerseys, and handbags. According to Sotheby’s, these categories brought a 40% increase in total sales in comparison to last year.
These new categories, as emphasised by Sotheby’s, focus on creating a crossover between the categories to cover all areas of collector interests. Buyers of one category are converted to buying in another, and then can be upsold to more valuable items within the new category.
A recent example of the blending between categories can be seen at the Sotheby’s X Victoria Beckham pop-up gallery at the designer’s boutique in Mayfair (February 2025)
Christie’s is also increasing their foothold into alternative categories with their acquisition of Gooding & Company, allowing them to re-enter the classic cars market.
As reported in The Art Basel & UBS Survey of Global Collecting 2024, of all HNWIs surveyed, in the next 12 months 16% intended to buy jewellery, gems and watches, 11% luxury handbags, 10% luxury sneakers, 8% wine, whiskey and spirits, 7% classic cars, boats and jets, 5% sports assets.
HNWI Intentions for Purchases of Collectibles in the Next 12 Months - All HNWIs (©Arts Economics, The Art Basel & UBS Survey of Global Collecting 2024)
Millennials are leading in the generation intending to purchase luxury handbags and sneakers in the next 12 months (11% and 10% respectively).[6] Converting younger collectors of other categories to Fine Art is essential for art market growth.
In Mainland China, 30% of HNWIs surveyed intended to buy jewellery, gems, and watches, 18% luxury handbags, and 15% wines, whiskey and spirits,[7] indicating the region as a major area of growth in those categories and a reason why Sotheby’s and Christie’s have invested in the area.
Cryptocurrency Payments
2024 saw an increase in cryptocurrency bids. Sotheby’s announced crypto payments for certain lots at its New York November sales. Notably, Maurizio Cattalan’s Comedian, bought by the founder of the cryptocurrency Tron, accepted cryptocurrency as a form of payment in the evening sale.
There are restrictions on the type of currency and accepted exchange wallets. Currently, for cryptocurrency payments to be accepted, the seller has to be willing to accept the payment in cryptocurrency, so until there are more participants in the market, the use of cryptocurrencies is limited.
Sotheby’s inaugural sale in Diriyah accepted cryptocurrency payments for all lots in the sale, and it is reported that Sotheby’s is already planning expansion of cryptocurrency acceptance across more sales and categories. Allowing crypto payments invites new participants to the auction market, thus allowing for growth.
U.S. President Trump in January 2025 set up a cryptocurrency working group to propose and introduce digital asset regulations, keeping to his pre-election ‘promise’ of overhauling U.S. crypto policy. Furthermore, he has also discussed creating a strategic Bitcoin reserve for the U.S., which will likely increase confidence in the crypto market if it goes ahead.
With this continuing, it is likely that confidence in cryptocurrencies will grow in the art market in the U.S., pushing for more businesses to offer crypto as a form of payment.
However, a stable cryptocurrency market is paramount. The market has dropped recently following announcements of U.S. tariffs on China, Canada and Mexico. This is after a record high market price on 20 January following U.S. President Donald Trump’s inauguration.
Cryptocurrency is banned in China,[8] so the growth in cryptocurrency payments in art businesses in China is restricted until such laws are altered.
The sales of Digital Art and NFTs (this category has been the only category to allow cryptocurrency payments in recent years) have increased in volume between 2023 and 2024, however the mean hammer price has decreased. The graph below shows that although the volume of lots has increased overall since 2020, the prices have been nowhere near the peak in 2021 after the decline of Ethereum in 2022.[9]
The outlook for Digital Art and NFTs is reliant on U.S. policies being executed, an increase in market participants, and a stable cryptocurrency market.
Digital Art and NFT Mean Hammer Price and Total Lots by Year (Overstone Analytics)[10]
Conclusion
The U.S. holds the majority of the art market share and this is expected to continue into 2025 and beyond. Consequently, the political and economic climate is key for the art market rebound following the 2023 market contraction. Historical data indicates growth over the next 12 months after U.S. President Donald Trump’s re-election. However, favourable policies for market participants, stability and confidence are essential for this resurgence to occur, all of which can be threatened by shock events, which the first few weeks of 2025 have not been short of.
Although the U.S. holds the art market majority share, 2024 saw increased real estate investment into Asia and the Middle East by Sotheby’s and Christie’s. With billionaire growth anticipated in all regions following a rise in 2023 to 2024, a global shift in the art market towards these regions is expected in 2025.
Investment in Asia and the Middle East is linked to a broader strategy to expand collector categories, particularly in the luxury sector. Not only does this increase auction house revenues and income streams, but alternative categories introduce new collectors to fine art through the intersection of art and luxury. Collector tastes can be developed and can drive participation and growth in the art market. Thus, the emphasis on the luxury sector is set to continue, particularly in Asia and the Middle East.
An increase to cryptocurrency payments is already starting to occur and will likely continue into 2025 as a means to attract more collectors to the art market. However, growth will be restricted to countries with increased confidence in the crypto market, such as the U.S. if President Donald Trump maintains his support of crypto strategies and regulations, whilst China is expected continue to lag behind until the ban on cryptocurrency is lifted.
Lower price segments of the art market have already expanded, as evident by the TPG analysis, and are expected to grow in 2025, offering an accessible entry point for new collectors. However, Overstone’s analysis highlights the continued shrinking of the top end of the art market. Despite positive sentiment following the Q4 2024 sales, increased confidence and active participation from both buyers and seller at the top end over the course of 2025 remain critical for a full recovery of the art market.
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[1] Data used for this analysis includes lots offered with a low estimate above 50,000 USD from Sotheby’s, Christie’s, Phillips and Bonhams.
[2] Please note that smoothing has been used in the graph for interpretability of the data. Data used for this analysis includes lots offered with a low estimate above 50,000 USD from Sotheby’s, Christie’s, Phillips and Bonhams.
[3] Data used for this analysis includes lots offered with a low estimate above 50,000 USD from Sotheby’s and Christie’s.
[4] Clare McAndrews, The Art Basel & UBS Art Market Report 2024, pp. 25-26
[5] UBS Billionaire Ambitions Report 2024, pp. 12, 18
[6] The Art Basel & UBS Survey of Global Collecting 2024, pp.157-158
[7] The Art Basel & UBS Survey of Global Collecting 2024, p.157
[8] Angell XI, The Art Basel & UBS Art Market Report 2024, p. 47
[9] The cryptocurrency Ethereum had the largest market share of 72.3% in the NFT blockchain in 2023, according to independent crypto data aggregator CoinGecko, so its value is closely linked to the NFT market.
[10] Data used for this analysis includes lots offered with a low estimate above 50,000 USD from Sotheby’s, Christie’s, Phillips and Bonhams.