The picture isn’t pretty for art investors; sales are in a deep slump

More than half of art works sold for a negative return, marking the worst performance this century. So, is it a good time for bargain hunting investors?

Canaletto’s ‘Venice, The Return of the Bucintoro on Ascension Day’, sold for an artist record, but the owner would have got a better return on the S&P 500. Picture: Joanna Chan

The art market is in a slump that shows little hope of abating. Adding to the evidence is an analysis from academics Jianping Mei and Michael Moses, who study repeat sales of artworks sold at the major auction houses worldwide to capture the financial performance of this notoriously opaque market.

Their conclusion: Things are in bad shape. Not only did repeat sales result in negative returns, more than half of all repeat sales realised a loss. “There’s never been a time this century when returns have been this bad for this long,” Moses says.

As Moses and Mei put it in a paper from their art consultancy, the results from the autumn of 2024 and the spring of 2025 win the award for “As Bad As It Gets With No Green Shoots In Sight”. But results have been “consistently poor” for the past six auction seasons, Moses says.

That fact has been apparent in the sales results at the major auction houses. Sales rose 1.2 per cent at the three largest auction houses – Christie’s, Sotheby’s and Phillips – in the first half of the year in New York, according to ArtTactic, a London-based data and analysis firm. But globally, sales fell by 6.2 per cent, ArtTactic said.

Mei and Moses focus on a universe of works sold since 2000 and bought at any worldwide auction house since 1970 in an approach that mimics stock analysis.

“The only way you get a picture of return is to look at the change in a stock price over time. This is exactly the same,” Moses says.

To assess the season, the researchers calculate the compound annual return of works sold and the standard deviation of those returns (a measure of how much the returns have varied over time). They also look at the “coefficient of variation”, or COV, to measure the risk of each unit of return.

According to their analysis, the mean of all individual returns of works sold in the spring auction season globally was a negative 0.2 per cent, down from essentially zero, or 0.1 per cent, a year earlier. While the trend in returns headed lower, the trend in risk headed higher – to a standard deviation of 16 per cent, resulting in a COV of negative 80, a very low score of risk for return. It’s only the second time since 2000 that the percentage of risk for return was negative, Mei and Moses said.

“This is not a good thing since most investors prefer assets that have a positive and relatively low risk per unit of return,” they wrote.

The pair’s analysis also tracked the rate of unsold auction lots this season, finding it was on the high side (about 23 per cent) but not a record. That was achieved in 2016, when more than 30 per cent of lots went unsold.

But over the past three auction seasons, Mei and Moses found more than 50 per cent of works offered in their repeat-sale database were sold for a negative return. “Again, the worst performance in this century,” they said.

Of course, Moses says, “if you believe in mean reversion, which we do, this might not be a bad buying opportunity”.

Which categories perform better

The worst-performing category for the season was post-war and contemporary art, which posted a mean compound annual return of negative 2.4 per cent. The best performer was British painting, with a return of 3.4 per cent.

Old Master paintings also slipped, turning in a mean compound annual return of negative 0.9 per cent and a risk for return of negative 17.6.

Moses notes that even the stellar sale of Venetian school painter Canaletto’s Venice, the Return of the Bucintoro on Ascension Day (circa 1732) – which sold for an artist record of $US43.7m ($66.75m), with fees, at Christie’s on July 1 in London – didn’t deliver as impressive a return on closer inspection.

The painting of a Venice view sold above a presale estimate of $US27.5m. But, Moses notes, the end result for the seller was a 5.5 per cent return. That beats the 4 per cent average return of 43 works by Canaletto in the Mei-Moses repeat-sale database, but was “well below the double-digit return of the S&P 500 for the same period”, he says.

But, Moses adds, the seller got to enjoy the painting for the decades since it was bought at a Paris auction in December 1993.

“The Canaletto owner got 30-year Treasury returns and the joy for free of having that wonderful painting to see every morning, or evening. That’s the beauty of art,” Moses says.

Barron’s