Fine art becomes an asset class

Investment in the art world is booming. At least, that’s what the headline numbers suggest. According to The Art Basel and UBS Global Art Market Report 2026, sales of art increased by 4% year on year to US$59.6bn in 2025. Meanwhile, Deloitte’s Art & Finance Report 2025, produced with ArtTactic, found that ultra-high-net-worth individuals invested US$2.564 trillion in art and collectables in 2024, and that is expected to reach US$3.473 trillion by 2030.

These figures can be misleading, though, argues Astrid Rosetti, founder of Rosetti Firmenich Art Advisory, who says that the market is picking up after two years of contraction. ‘We should be very careful not to confuse those headline sales with the health of the overall art market,’ she says.

Big-ticket auctions, in which museum-quality works by artists such as Pablo Picasso and Mark Rothko sell well, can also skew the perception that the art market is booming, says Rosetti. ‘The Lewis collection, which racked up nearly £300m at Sotheby’s [in London on 24 June 2026] broke the record for the most expensive single-owner collection sold in Europe, while the May auctions in New York at Christie’s, Phillips and Sotheby’s generated some US$2.5bn,’ she says.

More nuanced

However, the broader picture is, says Rosetti, more nuanced. ‘Beyond the big auction headlines, the underlying ecosystem tells a more complicated story. Among my clients, collectors remain willing to deploy significant capital, but they focus on high-quality works with proven market depth. I would describe today’s market as extremely disciplined rather than exuberant,’ she adds.

Harry Smith, executive chairman of art advisory practice Gurr Johns, agrees that more capital is directed towards the most prestigious works by the best-known artists. ‘The highest quality examples are holding their value and increasing value faster than [those of] average or less good quality,’ he says.

‘Even within Modern art, which in the last few years has been more in demand than traditional art, there is a split between established Modern artists such as Francis Bacon and David Hockney and the young artists who are still working in the so-called wet-paint market.’

The latter category describes contemporary works sold within three years of their creation; Smith notes that it has been ‘very dynamic, where an artist nobody has heard about suddenly becomes very much in demand. But, like any volatile market, it can go into reverse very quickly, and a lot of the wet-paint market has gone into reverse.’

Advisory growth

As art investment has developed, the advisory sector has grown to meet the specialist needs of buyers. According to the Deloitte report, 51% of wealth managers now offer art-related services, compared with a quarter in 2011.

There’s also an increase in rise of mid-market artworks in wealth strategies, which Deloitte describes as works priced between $50,000 and $1m. “This segment generated over $1bn in sales in 2024, representing 25.8% of the auction sales value and 31.7% of lots sold, making it a substantial, yet often overlooked, part of the art market,” it says in its report.

There’s also competition from certain luxury collectibles. ‘Watches have gone up massively over the last 10 years, especially Patek Philippe and Rolex watches, whereas brown (classic wood) furniture has gone down massively over the past 20 years,’ says Philip Hoffman, founder and chief executive of Fine Art Group.

When it comes to Deloitte’s assertion that next-generation collectors are reshaping the art market by prioritising cultural impact and legacy over financial returns, Gio Edid, head of research at Maddox Gallery, suggests that this may be partly down to pragmatics. ‘Being seen as overly focused on resale or investment returns can make it harder to secure the best works from certain galleries,’ she says.

Art can take time to resell, with no guarantee a work will appreciate, Edid adds: ‘ArtTactic’s 2026 analysis reinforces this point; works resold within five years produced average losses of 9.2% in contemporary art and 7.6% in post-war, while works held for more than 20 years generated average annual returns of 8.9% and 9.6% respectively.’

Shifting sector

Hoffman believes that art investment as an asset class has come a long way. ‘Thirty years ago, there was no discussion of art as an asset class. Today, there is a massive discussion. It becomes a big part of people’s wealth and therefore it needs managing properly,’ he says.

A major area of growth has been the increased activity of lending against art, identified in the Art Basel and UBS report. ‘Our view is that this is a big growth area,’ says Hoffman. In February, Fine Art Group completed a US$450m syndicated loan against a US$1bn collection, one of the biggest ever undertaken in the global art world.

How the sector will perform over the next few years could be determined by a combination of factors. A number of high-profile galleries have closed around the world, such as the London’s Stephen Friedman Gallery in February. On the flip side, a series of art fairs have opened, such as Art Basel Qatar, which launched in February.

Although the current Middle East hostilities are yet to impact art investment, Hoffman says that the Qatar opening, alongside the wider proliferation of art fairs, has had a diluting effect, with less volume of sales at each. In the broader macro sphere, art has largely remained exempt from US President Donald Trump’s tariffs. Therefore, art sales have remained relatively insulated from direct cost pressures affecting other luxury categories, says Edid.

‘If tariffs continue to make it more expensive to move or acquire these assets, art’s exemption could make it relatively more valuable in the broader collections market,’ she says.