2025 Art Market Recovery, Fairs Expand in Gulf, VAT Cut in Italy

The global art market saw an unexpected recovery in late 2025, driven by record auction sales of Gustav Klimt and Frida Kahlo, prestigious collections like Karpidas and Lauder, and strong performance in the Middle East. Sotheby's reported global sales of $7 billion (+17% vs 2024) and Christie's $6.2 billion (+6%). However, mid- and small-sized galleries faced closures due to rising costs and shifting collector habits, with notable closures including Blum, Clearing, LambaLambdaLambda, and Hot Wheels. Major art fairs expanded into the Gulf: Art Basel will launch in Doha in February 2026, and Frieze will debut in Abu Dhabi's Saadiyat Cultural District in November 2026. In Italy, VAT on art imports and sales was reduced from 22% to 5% on June 20, 2025, following similar moves by France (5.5%) and Germany (7%). Looking ahead to 2026, transparency and AI tools are expected to reshape the market, attracting younger collectors. Pace Gallery, Emmanuel Di Donna, and David Schrader announced a new New York business focused on private sales of blue-chip 20th-century artists. Thaddaeus Ropac opened a Milan gallery, and Hauser & Wirth is reportedly eyeing Palermo.