Gen-Z Buyers Are Shaping the Auction Market – and They’re Choosing Bags Over Art

Collectibles are emerging as the biggest source of auction activity — and new buyers are behind the charge. 

It’s no secret that the art market has had a rough couple of years, particularly at the ‘big three’ auction houses: Christie’s, Sotheby’s, and Phillips. ArtTactic, a research and analytics company, reported that art sales at those firms fell 44 percent in the first half of 2025 compared with the same period in 2022, blowing a $3bn hole in revenues.

Global economic uncertainty, raging conflicts, soaring interest rates, and a cooldown of post-pandemic speculative buying have all contributed to collectors tightening their purse strings. And while the marquee autumn sales in New York hinted at a rebound, the real growth story has been happening elsewhere: quietly, lucratively, and in the Middle East.

That growth engine is luxury. Since 2019, sales of handbags, watches, jewelry, and other high-end collectibles have climbed steadily, to the point where luxury is threatening to rival art as the auction houses’ financial backbone. If current trajectories hold, it may soon surpass it, fundamentally reshaping what the auction business looks like, and who it is for.

Sotheby’s offers the clearest case study. In December, the auction house projected $7bn in total sales for 2025, with $2.7bn coming from luxury alone, up 22 percent on 2023. It is the fourth consecutive year Sotheby’s luxury division has cleared $2bn, while private luxury sales have ballooned by 350 percent year-on-year. Much of that momentum is coming from the Middle East, where the luxury market was valued at around $13bn — and growing — by the Dubai-based Chalhoub Group.

See also: A Rare $20m Rembrandt Is Being Sold at Auction – for a Remarkable Reason

While this figure pales in comparison to the US luxury market, for example, which is valued at $115.5bn for 2026 by Mordor Intelligence, Sotheby’s is one of the few international auction houses operating in the UAE. Its $1bn deal with Abu Dhabi’s sovereign wealth fund, ADQ, has given it a powerful foothold in the region, culminating most visibly in Abu Dhabi Collectors’ Week. The event generated $133m from outdoor auctions last December in the UAE.

When I asked CEO Charles Stewart at Collectors’ Week if luxury could eclipse art, he was pragmatic. “Our DNA and heritage are very much rooted in fine art,” he said, “but the addressable market across luxury categories — cars, jewels, watches, wine, spirits — is far larger than the art market.” While he sees luxury potentially surpassing art in sales, Stewart stressed that the two remain distinct parts of the business.

As for whether booming luxury sales might also change the Sotheby’s identity, Stewart was firm. “No, absolutely not,” he said. “We’re not choosing between art or luxury — we’re choosing the client. Top art collectors also buy watches, wine, property, and cars. It’s client-led, not object-led.”

Christie’s is telling a similar story. In the first half of 2025, luxury sales rose by around 30 percent year-on-year. In December, the house said it expected luxury to account for close to a quarter of its projected $6.2bn in 2025 sales. It, too, is pushing into the Middle East, becoming the first international auction house licensed to operate in Saudi Arabia in 2024, even as Sotheby’s stole a march by holding the kingdom’s first international auction in February 2025.

Last year’s headline-grabbing results help explain the appeal: a $10.1m Jane Birkin Hermès bag, a $30.2m Fabergé Winter Egg, a $25m 9.51-carat blue diamond. Beneath the trophy lots, however, is a more consequential shift; most business is done online, and luxury has become the primary entry point for new buyers at both Christie’s and Sotheby’s. A large chunk of those buyers are Millennial and Gen Z. They are shaping the future of the auction business, and they have a thirst for luxury collectibles.

The next generation of bidders are less reverential about category boundaries and more comfortable treating watches, handbags, and jewelry as both cultural objects and financial assets. Digitally native, brand-literate, and globally mobile, they’re shaping auction houses around themselves rather than vice versa. Whether or not they graduate to buying Picassos, they are already redefining what the future of the auction market looks like, and that future is glossy, global, and unapologetically client-led.