Last year, as I’ve been reporting, the art market appeared to largely heal itself. Now, we have confirmation in the form of Clare McAndrew’s highly anticipated annual report on the state of the art market, which gives new depth to our existing portrait of the dramatic turnaround, especially in the auction world, after the middle of last year. It all added up to an estimated $59.6 billion in total sales in 2025—an increase of 4 percent from the year before.

Of course, 4 percent growth, especially from a low base, isn’t going to solve all the problems. But it does belie a continuing process of renewal. One surprise, for instance, is that more new galleries opened than closed, though there was perhaps too much attention on the latter category.

As always, McAndrew’s report provides a nuanced portrayal of the lives and challenges of art dealers, if you’re willing to read deeply enough. For now, let’s just say that it’s hard out there for an art dealer. Costs are going up, and although sales are also beginning to rise, they're not rising evenly for everyone. Some top galleries that bring in more than $10 million a year are seeing a recovery, but it’s happening at fewer than half of them. Plenty of small galleries with sales below $500,000 are opening, but those guys are going to take some time to turn into bigger enterprises, if they ever do. And they still have to navigate a thicket of challenging issues—including rising operating costs and a narrowing client base—to start making money.

The healing also extended to the public auction market. There, too, McAndrew has plenty of interesting numbers that show the top end of the market leading us into renewed interest and potential growth. The report is divided into three main categories of research and observation: macro trends, dealers, and auction houses. For tonight’s first pass at Clare’s data, I’m going to recap what she’s found in each.

On the whole, McAndrew finds that the number of art transactions increased to 41.5 million last year—up 2 percent from 2024. More transactions are a good thing. But the bulk of the overall rise in the market is coming from the resurgence of higher-value transactions, especially above $10 million, in both public and private sales.

The United States continues to carry the art market on its back, accounting for 44 percent of the overall market sales, or $26 billion. That’s up 5 percent year over year in sales, and 1 percent in market share. The United Kingdom was the second-largest art market, with sales of $10.5 billion—a 2 percent rise in spending to maintain 18 percent market share. China remains the third-place market at $8.5 billion, or 14 percent of the total.

There have been times in the past when the market share was more balanced. The diminution of London and Hong Kong as sales centers is probably the largest unexplained factor in the art market’s decline since 2022, and the solution to its remaining woes could lie in solving this riddle. Putting that to one side, the surprise in McAndrew’s numbers comes in the next tier. The Japanese market, which showed a lot of promise in 2024, pulled back last year. But France, Korea, Switzerland, Austria, and Spain all logged strong gains in sales, ranging between 6 and 13 percent. Meanwhile, Germany and Italy, which both have governmental measures that hamper the art market, fell off—in Germany’s case, by a tough 10 percent.

Nothing makes the point that art dealing is a hard business better than McAndrew’s latest data. According to her report, the dealer sector was up 2 percent over 2024, to $34.8 billion. But the good results were not shared across the board, and costs outpaced sales gains. No wonder that 39 percent of the galleries McAndrew surveyed reported lower profitability in 2025. Another 29 percent said their profit picture remained unchanged, but a robust 33 percent of galleries moved the ball forward on profits.

When McAndrew grouped the galleries by the size of their turnover, she saw something similar but different. The galleries with annual sales below $500,000 were growing—and by double digits. Dealers in the middle, with sales of $1 million to $10 million, were stagnant. The gallery with over $10 million in turnover grew revenue slightly, by 3 percent. But only 43 percent of the galleries within that last group posted gains. So even at that altitude, a majority of dealers are still waiting for the market to turn their way.

One interesting nugget in McAndrew’s research is the revelation that small galleries have an average of 29 clients, and large galleries average 125. These numbers remind us how small the art-buying world really is, and it isn’t growing—yet. According to McAndrew, the average number of clients per dealer for all dealers is 57, the lowest since 2021.

Buyers might be leaving due to the rise in ancillary costs. Dealers’ biggest expenses are staff and real estate. But travel expenses rose 6 percent, the cost of art fairs went up 9 percent, and shipping and logistics were up 10 percent. Art dealers are having trouble staying ahead of this grinding cycle. And before you suggest they give up on travel and sell more online, you need to know that art fairs accounted for 35 percent of sales last year. The proportion of sales taking place online dropped 6 percent, to 16 percent. We’re clearly back to I.R.L.

Finally, overall public auction sales were up 9 percent, to $20.7 billion, boosted by the late-season flurry of high-value sales. The U.S. plays an outsize role here: 61 percent of the lots above $1 million were sold here last year, along with 78 percent of lots above $10 million. Meanwhile, the value of works above $1 million rose by 21 percent last year, and the value of works above $10 million rose by 30 percent, despite only 9 percent more lots in that band.

Broken down by category, postwar and contemporary art accounted for 45 percent of the fine art auction market, totaling $4.5 billion. Modern art represented 24 percent, or $2.4 billion, up 9 percent year over year. Impressionism and its ilk made up 19 percent of the market, at $1.8 billion, up 5 percent. And Old Masters leapt a huge 30 percent, to $1.2 billion. That’s because twice as many lots in the category sold for more than $1 million compared to the previous year.

These numbers are promising. Of course, what they mean in the face of a war in Iran and the closure of the Strait of Hormuz is anybody’s guess. Having finally vanquished uncertainty last year, we now look to see if the world’s wealthiest are in the mood to ramp up their buying. Or will they retreat again to wait and see?

That’s all we have room for today. I’m hoping to go into more granular detail with Clare McAndrew and her charts in future installments of the Inner Circle. Look for those soon. In the meantime, enjoy your weekend.

M