New York sales likely to top £1 billion as contemporary art works go under the hammer.

By the end of this week, New York will have come to the end of a fortnight of impressionist and contemporary art sales at its main auction houses. Already, the auction record for a Modigliani has been broken. By Thursday, if the sales reach expectations, £1 billion will have been spent.

For ordinary mortals — those dealing with the bleak everyday challenges of recession on both sides of the Atlantic — the prices are staggering. How come, when our own economy is struggling through the deepest downturn since the Second World War, the art market seems to have wriggled out of the crash of 2008 and auction houses are mounting what one expert calls “ambitious, pumping, thrusting” sales? After last week's impressionist sales, it is the turn of contemporary art to go under the hammer. At Christie's, Campbell's Soup Can With Can Opener by Andy Warhol is among the star turns, estimated at $30 million-$50 million. Sotheby's has a Coca-Cola bottle canvas by him at $20 million-$25 million.

The answer, or part of it, is that the very top of the art market is semi-detached from the movements of individual economies. Rather, it is bound up with the tastes and choices of a number of super-rich people in Europe and America — and, increasingly, Russia, China and West Asia. As Brett Gorvy, deputy chairman of Christie's, put it: “The market is not reliant on one single economy at any one time.” In pockets, at least, the very rich are spending on luxuries — a category into which contemporary art arguably falls — without apparent restraint. In Hong Kong this month, Sotheby's held an auction of fine wine that saw an Asian buyer purchase three bottles of 1869 Chateau Lafite for $232,000 each, a new record.

Meanwhile, the tastes of Chinese, Russian and West Asian billionaires are increasingly embracing contemporary art. One of the stars of November 10th's Christie's sale — estimated at $40 million, over double its previous saleroom record of $16.3 million — is a Roy Lichtenstein titled Ohhh ... Alright ... .

“It's not too racy,” said Sarah Thornton, art market expert and author of Seven Days in the Art World. “So it could easily go the Middle East. And it's totally palatable to the Asian and Russian markets, where figurative work is preferred. It seems the taste for pretty girls is fairly universal.” This month blue chip London galleries, such as White Cube and Timothy Taylor, travelled to the Abu Dhabi art fair to sell to their growing numbers of West Asian clients. Abu Dhabi's rising appetite for western art of all kinds is evidenced by the development of Saadiyat Island, a new cultural district in which branches of the Louvre and Guggenheim museums are planned to open by 2014.

Ms Thornton has noticed a trend among the emerging super-rich. “They tend to start by collecting art of their own nations, whether Middle Eastern, Russian or Chinese. But — perhaps as their own businesses become global businesses — their predilections shift towards contemporary art.” Having the “right” contemporary art is a totem of a certain kind of lifestyle, a badge of elite wealth. Mr. Gorvy says the numbers of collectors from Hong Kong, Taiwan and China “increased dramatically” over the past two years.

It was partly because of its international nature, spanning many economies at once, that the art market recovered from its big dip of late 2008 (in the wake of the collapse of Lehmann Brothers) faster than most had expected. “It took six months, and people expected it to be four to five years,” said Mr. Gorvy.

The speed of recovery itself breeds confidence, so that sellers who had been anxious to consign works of art to the saleroom two years ago are now returning to the market.

There is, nonetheless, a different feel to the auction rooms than there was mid-decade.

Speculation on new names is down; tried and tested artists with impeccable records are on the up.

Amanda Sharp is cofounder of Frieze art fair, London's most important annual selling event for contemporary art, and a barometer of the market as a whole.

Though last month's fair was “in the main good”, the market was certainly “much slower than the extreme times of 2006”.

She added: “In 2008 there was fear in the air. Last year, you felt galleries had made tough decisions, rolled up their sleeves and carried on. This year it felt like the panic had gone. There was a post-bling feel to it, and most galleries were showing considered and restrained displays.” There also practical reasons for buying art. At a time of economic uncertainty, art is a hedge against currency fluctuation. “If you buy a property in Mayfair, you will always have to sell it in pounds,” said Ms Thornton. “If you buy art, its value will be in whatever denomination you choose, depending on where you choose to put it on the block.” Arguably, the art market has something in common with the gold market, which is bouncing at the moment, with prices topping $1,400 an ounce last week. Art, like gold, is tangible — not a stock or a share, or complex derivative that cannot be physically embodied.

“I spoke to a gentleman the other day,” said Mr. Gorvy. “He bought a painting for $5 million in 2008 and it's now worth $6 million. Whereas many of his shares are worth nothing at all.” — © Guardian Newspapers Limited, 2010

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