A Giacometti statue smashed the art auction record at Sotheby's
late Wednesday, and, surreal though a price tag of $104.3 million may seem, experts predict there may be even higher numbers to come.
"You only need two individuals to take something to $104 million or more," said Philip Hoffman, founder of the Fine Art Fund Group which counts more than a dozen billionaires among its clients.
"I am confident we will break $104 million in the next couple of years," he told Reuters.
Whatever happens to the broader economy, there will always be super-wealthy individuals who look at the art world either as a passionate collector or a shrewd investor or both.
And there are institutions and even governments in the market for rare works of art to fill new museums and galleries that have sprouted up, particularly in the Middle East.
Not that the art market has been immune to the global economic chill of the last two years.
Christie's, the world's biggest auctioneer in 2009, saw its sales fall by over a third from 2008 in dollar terms, as owners kept their prized possessions away from the market and buyers became more choosy about what they purchased.
But by the end of the year confidence was quickly returning as other markets recovered and big bank bonuses were back.
In December Christie's sold the most expensive lot of the year, a Raphael which fetched $47.9 million, a record for any work on paper.
And now Sotheby's has the overall record of $104.3 million for Giacometti's stick thin statue "L'homme qui marche I" (Walking Man I), just beating the previous top auction lot of $104.2 million for a Picasso painting set in New York in 2004. Private sales have taken place for significantly higher amounts.
FREEING UP SUPPLY
What the recent trend is likely to do is free up supply of "blue chip" art, experts said.
"What people tend to forget is that supply is the crucial thing in the market," said Georgina Adam, editor-at-large of The Art Newspaper.
"I think what this demonstrates is that first, great works of art will make huge prices, and second, this will loosen up supply."
She and Hoffman saw greater investment in art over the coming months as a hedge against inflation and as an alternative source of earnings in uncertain economic times.
"Many clients burned their fingers in other asset classes, and would quite like to buy into tangible assets and so have put money into things like gold, diamonds and art," Hoffman said.
He added that his fund has put more money into art in the last month than at any time in the last eight years, pointing to short- to medium-term strength.
While confidence is high for the so-called "masterpiece market" that includes rare works by established masters like Giacometti, Raphael and Picasso, the contemporary sector may take longer to recover its pre-crisis swagger.
What happens to the rest of the market is less clear, although the disconnect that some experts feared between the high end and anything below it has yet to materialize.
"To an extent, the top end pulls along the rest," said Adam. "Nevertheless, there could be a de-coupling between the best and the rest.
"What you do is look at the (smaller) day sales, and they have also been quite strong. There is just a much broader audience for art now," she added.
(Editing by Paul Casciato)