Gallery closures and downsizing suggest that the art market faces challenges, even after the impressive results for a certain auction in the fall of 2025. The global market is also seeing the rise of new regional hubs, according to Citi Wealth.

The global art market entered 2026 with a spring in its step, with optimism at levels not seen since 2022, but confidence is “highly selective” and several galleries have closed.

Traditional art auction powerhouses such as London and New York have contended with slow growth and structural changes, while the international market keenly anticipated the Art Basel event in Qatar, in early February, Citi Wealth said in a report, State of the Art Market 2026: Don’t Call It A Comeback. (The Art Basel event in the Gulf state was held before the US and Israel engaged in military clashes with Iran over the latter’s nuclear program.)

“As of early 2026, confidence has returned to the art market, but not uniformly. Optimism is focused at the market’s high end and its accessible end. By contrast, sentiment toward the middle of the market is selective and cautious,” Betsy Bickar, art advisory head, Citi Wealth, said in the report. “Geographic power is also becoming less concentrated, as emerging regions have gained influence while traditional centers contend with slower growth. Rather than broad upward momentum, the market is characterized by buyer discernment.”

After a run of declining sales, Bickar noted that the November 2025 Modern and Contemporary Art Auctions in New York registered a total of $2.2 billion – surging by 77 per cent on the same period a year ago, although down 30 per cent from 2022’s high-water mark.

“There is no better example of strength at the top end of the market than the headline-grabbing $236.4 million fetched by Gustav Klimt’s Portrait of Elisabeth Lederer (1914-1916),” she wrote. “Drawn from the collection of the late Leonard Lauder, this storied painting set a new auction record for the artist and became the most expensive Modern work ever sold at auction. (It was also the most expensive piece ever sold by the venerable auction house Sotheby’s). With an opening bid of $130 million, the contest lasted for over 20 minutes, with six unique bidders vying to acquire this iconic work,” she said.

The behavior of the fine art market and the volume and value of sales at auctions and in other channels can be a barometer of how optimistic or not HNW individuals feel about their wealth and life in general. Fine art, while a large “niche,” is also an investment area in its own right. According to the latest UBS and Art Basel annual report, issued in March, the global art market returned to growth in 2025, with sales increasing by 4 per cent year-on-year to an estimated $59.6 billion.

“The art market entered 2026 amid greater optimism than we have seen since its peak in 2022. The positive sentiment is largely the result of headline-grabbing results at November 2025’s marquee Modern and Contemporary Art auctions in New York and reports of strong sales at major art fairs, including Art Basel Paris and Miami,” Bickar said. “The inaugural edition of Art Basel Qatar has elevated the Middle East’s standing on the international art scene, notwithstanding the uncertainty following recent geopolitical events.”

Gallery closures
Bickar noted that the November 2025 season, while it had its bright spots, also pointed to a lack of confidence in the contemporary market. “Numerous galleries in the US and worldwide closed in 2025, largely in the second half of the year,” she wrote. One of the most striking closures was that of Tim Blum’s eponymous BLUM gallery. Another closure was the Venus Over Manhattan gallery in New York, which had operated for 14 years. Other large galleries have shrunk, with some locations being discontinued. The trend continued into this year, Bickar wrote.