The sale of luxury goods in China slumped in 2024 by an eye-watering 18% to 20%, according to the consultancy Bain & Company, bringing to an end a period of “exponential growth” in the country. The art trade has suffered as well, with the Art Basel/UBS report citing a 31% drop in sales in 2024 in China, booting the country into third place in the line-up of the biggest markets.
“Follow the money” has always been the mantra of the art market, and auction houses and dealers have been anxiously seeking out new buyers in other regions. They see the Gulf, notably the Kingdom of Saudi Arabia in particular, as the most promising area, and for a number of reasons.
The United Arab Emirates’ (UAE) status as a tax haven is attracting moneyed residents from around the world, and the emirate has not imposed sanctions on Russian citizens. The result? “Half of Moscow is in Dubai,” Vera Alkhova, who runs a Russian-language Telegram channel covering the cultural scene in Dubai, Sharjah and Abu Dhabi, told The Art Newspaper in January. Russian money has flooded into the Emirates’ property market, although it doesn’t seem to be spilling over into art—yet.
Then there are the persistent but unconfirmed rumours that Art Basel will be asked to oversee Abu Dhabi Art, the government-run fair held on Saadiyat Island in November. And of course Sotheby’s has received an investment of $1bn from an Abu Dhabi sovereign wealth fund.
But while the Art Dubai fair reported solid sales, the real spotlight is turning on Saudi Arabia. Through its de facto head Mohammed bin Salman, money is being poured into cultural projects, as part of its Saudi Vision 2030 campaign. MBS, as he is widely known, is looking beyond fossil fuels and seeking to increase tourism with, notably, the AlUla project in the desert.
Art events such as the inaugural Art Week Riyadh and the second edition of the Islamic Arts Biennale were well received. And the wildly popular teamLab Borderless experience has just established a massive new museum in Jeddah, with unconfirmed investment from the kingdom itself.
Sotheby’s and Christie’s have both established outposts in Saudi Arabia, and Sotheby’s held a first auction in Diriyah in February. It offered a mixed bag of items, from art by Fernando Botero, Banksy, René Magritte and Refik Anadol to luxury goods—handbags, jewellery—although the latter didn’t fare as well as the art. The sale made a within-estimate $17.3m. It was held in a 250-seat outdoor amphitheatre, and achieved a sell-through rate of just 67% by lot.
I thought that it must have lost money for the firm, but a spokesperson for Sotheby’s denied this, saying it was “financially profitable”. Most importantly, 35% of buyers were completely new to the firm, he said, adding that it was a “great success in terms of nurturing an increasingly important market”.
Saudi Arabia has a young population—63% are under 30—so targeting them will be crucial for the future. But much depends on whether the MZ generations (Millennials and Gen Z, 29-44 and 13-28 year olds respectively) will step up to the plate.
The art market is currently asking itself why, when the number of billionaires has increased significantly in the past 15 years, it has stagnated. It is often murmured that luxury goods are the “gateway drug” for bringing new buyers into auction. Judging by Saudi Arabia’s inaugural session, art did better, which was unexpected. It will be interesting to see how the present pivot to the Gulf turns out in the coming years.