Are Hong Kong and Mainland China Poised for an Art Market Rebound?
As the Israel/U.S. war against Iran pushes oil prices higher and sends stock markets into panic, Asia is beginning to feel the effects across its own markets. South Korea’s KOSPI has dropped by more than 16 percent since the conflict began, while Japan’s Nikkei 225 has fallen roughly 10 percent. On Monday (March 9), the KOSPI sank 6.2 percent, and the Nikkei 225 fell by about 5.2 percent. All of this is happening just as the region had started to see renewed optimism in the art market, with buyers gradually returning—albeit more cautiously—after the worst of the Chinese real estate crisis and amid the growing dynamism of cultural ecosystems across South and East Asia. The real test for the Asian art market is, of course, Art Basel Hong Kong and the marquee auctions aligned with it, when around $200 million of art is expected to change hands. In the meantime, the recently published second edition of the Mishcon de Reya x ArtTactic China Art Market Report offers an updated perspective on the evolving auction landscape across Hong Kong and mainland China over the past year.
Hong Kong’s resilience has made it both an international trading nexus and a regionally anchored market—today the second-largest art capital in the world and the central hub of the APAC region. It combines regulatory simplicity and tax advantages—no VAT, no import or export duties on art and no capital-gains tax—with strong institutional investment and financial activity. (Its stock market expanded significantly in 2025, with a sharp increase in new listings and IPO fundraising, up 68 percent from 2024.) These favorable dynamics are bolstered by coordinated public policy and expanding cultural infrastructure. As the report notes, several recent initiatives are helping to build not only a frictionless but also a sustainably dynamic art ecosystem. Among them are the development of the Airport City Art Ecosystem at Hong Kong International Airport—bringing together studios, galleries and dealers alongside large-scale art storage and specialized logistics—and the continued expansion of the West Kowloon Cultural District, including the forthcoming Artist Square Towers, expected to be completed between 2026 and 2027.
As the market has stabilized after three years of contraction, Hong Kong and mainland China appear to be approaching an inflection point. Nearly 48 percent of international experts now expect growth in the region, with the strong participation of Asian bidders in New York last November providing additional cause for optimism. Overall auction sales in 2025 closed just 2.2 percent below 2024 levels. Yet, as elsewhere, the Hong Kong auction market saw a significant rebound in the second quarter—up 34.8 percent compared with the first part of the year—and ultimately finished 13.5 percent above the second half of 2024, underscoring a broader improvement in market confidence and transaction activity.
“Hong Kong witnesses not only regional demand but also serves as the gateway to Asia and beyond—where the art market continues to see robust Asian competition for blue-chip modern and contemporary masterworks in our global auctions,” Sotheby's Asia Chairman Nicolas Chow told Observer ahead of the upcoming sales, which are headlined by a Joan Mitchell masterpiece carrying a low estimate of HK$110 million (approximately $14 million), making it the highest-valued work Sotheby’s has ever brought to the Asian market.
Ada Tsui, vice president and head of department, 20th/21st Century Art, Christie's Asia Pacific, shared Chow’s optimistic outlook. “We have entered 2026 with a solid foundation. 2025 brought renewed confidence and engagement from APAC collectors, including at the masterpiece level. 15 minutes of intense bidding for the Asia-record-breaking Picasso in September, and sales for major works by Zao Wou-Ki and Basquiat, highlighted this momentum,” she told Observer. “The calibre of works we have consigned and the response from clients in region-wide previews reflects that market confidence.”
As the market becomes more selective, quality, rarity, diversity, fair pricing and strong provenance are crucial to Christie’s approach, she added. “This season’s lineup offers collectors unique opportunities,” she said, pointing to a group of fresh-to-market, rare works, including the vibrant red canvas from Gerhard Richter’s sought-after Abstraktes Bild series (estimate: HK$78-98 million / U.S.$10-13 million) and a stunning horse painting by Sanyu (estimate: HK$28-48 million / U.S.$3.6-6.2 million). Tsui also anticipated that Walter Spies’s Balinese landscape would break the artist’s auction record, among other highlights that include leading global names such as David Hockney, Zao Wou-Ki and Yayoi Kusama.
It’s important to consider the returns auction houses are seeing after the enormous investments they have made in recent years in securing prime, high-profile regional headquarters in the city. Sotheby’s and Christie’s have both taken steps to become luxury destinations, as cross-category buying behavior is becoming increasingly significant in Asia. Notably, Hong Kong still generated a 14.5 percent share of global auction sales despite the overall contraction in Modern and Contemporary art. While auction sales were 2.2 percent below 2024 levels—in line with global trends—transaction volumes reached a decade high, supported by continued digital adoption and the expanding luxury collectible offerings at each of the major auction houses.
According to the report, sales of luxury collectibles in Hong Kong auctions totaled $499 million, up 4.4 percent from $478 million in 2024 and accounting for 36.1 percent of the auction market. Christie’s Hong Kong Luxury Week sales last November, for instance, achieved a record total of HK$987,152,660 ($127,483,757), with total sales up 27 percent year-on-year.
Equally indicative of the demographic shifts within the Asian collector base is the rise of online participation. Online sales were 20.2 percent higher year-on-year, while in-room auction volumes declined by 7.4 percent. This dynamic may reflect the growing presence of a younger, digital-native collector base comfortable navigating global markets and fluid purchasing experiences across price segments.
In the Modern and Contemporary segment, the market follows a similarly sharp K-shaped pattern seen elsewhere, but one that appears even more polarized between two distinct tracks. Contemporary and ultra-contemporary art continue to feel the aftereffects of the “wet-paint” speculation that characterized much of the pandemic and post-pandemic period, particularly in Asia. By contrast, historically validated Modern and Postwar artists—with museum pedigree and stable mid-single-digit growth—are increasingly perceived as the safest store of value.
However, due in part to a contraction in trophy consignments, Hong Kong remained heavily exposed to the $1 million-plus segment, which declined 43.5 percent. In mainland China, auction sales of works priced above $1 million increased by 14.1 percent year-over-year, rising from $51.0 million in 2024 to $58.2 million in 2025.
In the mainland’s more domestically oriented market, Chinese blue-chip artists have performed consistently well. A striking example is Zhang Peili’s record CNY 71.3 million (approximately $10.1 million) sale for X? at China Guardian. Chinese artists accounted for 81.6 percent of the Modern and Contemporary artists offered at mainland auctions in 2025 and 89.3 percent of the total sales value.
The best-selling artist across Hong Kong and mainland China remained Zao Wou-Ki, with 14 lots sold in 2025, generating a total of $39.4 million—16.2 percent in mainland auctions and 83.8 percent in Hong Kong. Other artists achieving million-dollar sales included Pablo Picasso, Yoshitomo Nara, Yayoi Kusama, Jean-Michel Basquiat, Marc Chagall, Liu Ye, Zhang Peili, René Magritte and Zeng Fanzhi.
In the contemporary period, Yoshitomo Nara led the segment with $25.2 million in sales in 2025, with 99.5 percent occurring in Hong Kong and only 0.5 percent in mainland China.
In the recalibrated Young Contemporary market, most top-selling works were offered in Hong Kong, targeting the city’s more international and affluent collector base. Although his market has cooled from its peak, Nicolas Party led the segment in sales value in 2025, followed by a strong presence of regional names including Otani Workshop, Chen Fei, Ayako Rokkaku, Yan Bing, Li Hei Di, Matthew Wong, Wang Yuping, Xia Yu and Ji Xin.
Throughout 2025, one of the strongest drivers of the million-dollar segment was surging demand for traditional Asian works of art. As the market—particularly on the mainland—has been shifting away from reliance on a narrow international ultra-high-end segment to embrace a more diversified, culturally grounded regional demand, sales of traditional Asian art increased 32.4 percent year-on-year, making it one of the best-performing categories. In 2025, traditional Asian works accounted for 37.2 percent of total auction sales in Hong Kong by value, surpassing luxury collectibles and overtaking Fine Art, which declined to 26.7 percent of the market from 38.7 percent the previous year.
Driving these results is not only a strong regional collector base but also exceptional trophy consignments, in a market increasingly dependent on single-owner collections. The number of focused single-owner auctions rose 61.8 percent year-on-year in 2025, with Chinese and traditional Asian works accounting for 81.7 percent of these sales.
Two collections alone represented nearly half of the single-owner value that year. One was the Ise Collection sold at Sotheby’s Hong Kong in September 2025 across 182 lots, led by a HK$55.88 million Southern Song Guan celadon lobed dish and a HK$35.15 million Chenghua “lily” palace bowl. The other was the white-glove sale of the Okada Museum of Art collection, sold in November at Sotheby’s Hong Kong for HK$688 million ($88 million), led by record results for Japanese masters including Utamaro and Hokusai. Other important consignments fueling Hong Kong’s auction market in 2025 included the collections of Xiao Wan Liu Tang, Ai Lian Tang, Au Bak Ling and Chiang Chao-Shen.
Chow confirmed that demand has surged dramatically since mainland Chinese buyers entered the market around 25 years ago and has remained resilient ever since. “We were the very first to bring Chinese art to auction upon entering Asia. Last year, we achieved a record number of new bidders participating in our Asian Art sales for the first time in over a decade, while staging the most valuable series of Asian Works of Art since 2013,” he added, expressing high hopes for further top prices this season given the quality of consignments secured.
The survey overall provides grounds for cautious optimism. The market appears far more disciplined than the speculative boom Hong Kong auction rooms experienced in the past decade. With pricing largely reset from post-pandemic peaks, the current phase presents an increasingly attractive moment for selective re-engagement. Longer holding periods and longer-term collecting strategies are beginning to replace short-term speculation, encouraging greater stability and confidence. A renewed focus on quality—often driven by regional or domestic collecting priorities—is likewise producing particularly strong performances in the modern and historical segments, where historically validated artists continue to deliver the most consistent results.
Early Chinese women modernists, in particular, are attracting renewed scholarly and market attention. Figures such as Pan Yuliang (1895-1977) have seen auction sales nearly triple in 2025, continuing an upward trajectory since 2023. This momentum was highlighted when Tulips and Naked Ladies (1966) achieved $1.1 million at China Guardian in November. Her resurgence is also directing collectors toward a broader group of early Chinese women modernists—including Fang Junbi, Guan Zilan, Qiu Ti, He Xiangning and Hoo Mojong—supported by growing institutional and international exhibition activity.
At the same time, the recalibration in Contemporary and Young Contemporary markets allows disciplined buyers to be more selective, prioritizing artists with institutionally supported long-term markets over momentum-driven names. This shift is helping collectors build more meaningful, historically grounded collections that can shape the region’s cultural legacy in the long term.
Considering its current geopolitical position, Hong Kong and mainland China may also stand out for their relative stability and lower downside risk. Only 14 percent of respondents expect further contraction in the region, compared with 23 percent in the United States, 25 percent in Europe and 29 percent in the U.K. Meanwhile, the share of experts expecting growth in 2026 has risen sharply to 48 percent, up from just 19 percent in January 2025, while those anticipating further decline have dropped from 52 percent to 14 percent.
“The Hong Kong market is steadily moving from a period of correction into a more stable and resilient phase, while mainland China and Hong Kong continue to evolve along distinct yet complementary art ecosystems, shaped by differences in market orientation and collector preferences,” Jason Karas, founder and managing partner of Karas So LLP, in association with Mishcon de Reya LLP, told Observer. “As we enter the much-anticipated Hong Kong Art Month, we hope these insights will provide a valuable perspective to collectors and art enthusiasts worldwide.”
More art market insights
-
Inside the Art Marketplace, Elliot Safra’s Bid to Make Private Sales More Efficient
-
What Sotheby’s Buyer’s Premium Increase Reveals About the Major Houses’ Evolving Commercial Strategies
-
Why a Signature Can Make or Break an Artwork’s Price
-
The Art Market’s Renewed Confidence Amid a Sharper K-Shape Divide
-
Artificial Intelligence Is Quietly Rewriting the Rules of Art Valuation
-
MENA Artists Are Having a Market Moment That’s Built to Last