A lot has been written about the Giacometti sculpture that sold for a record £65 million last week; but what about the other 530 or so Impressionist and modern art works up for sale? Although less than a handful made record prices, over 80 per cent found buyers. The total for the week, including the lower-value day sales at Sotheby's and Christie's, was £259 million – £100 million more than the anticipated minimum. That's double the total of this time last year, and not far short of February 2008, when the boom was still in progress.
Amazingly, the average price has risen from £405,000 then to £542,000 now. So what is driving the market, and seemingly lifting it above recessionary economic conditions?
The average price leap has been influenced by the reduced number of lots offered, but there is more to it than that. One factor is to do with selecting what buyers want. After Christie's evening sale, which came unexpectedly close to its high estimate at £76.8 million, the company's Thomas Seydoux said that it had veered away from run-of-the-mill, conservative Impressionists in favour of "flashy, colourful modern pictures by the big names", where the predominant taste lies.
Laurence Graff, the diamond dealer and collector, bought the top lot – Picasso's vibrant Tête de Femme (Jacqueline) – for a double-estimate £8.1 million. Other top lots, all of which met their estimates, were a bejewelled gipsy girl, by Kees van Dongen, which sold for £7.1 million; and a small, sensuous painting of a reclining nude by Matisse, which sold to London dealer Ezra Nahmad for £3.8 million.
Another factor has been the improved supply that followed last November's positive results in New York. This fed what has been a pent-up demand since the drought of early 2009. One reason the market resisted the credit crunch for so long was that investors believed that art was a safer place to put their money than the bank or stock market, and that feeling persists.
At Christie's, there were signs that Russian money is flowing again. A decorative abstract by Natalia Goncharova set a new record for a female artist at £6.4 million; also selling above estimates to Russian buyers were works by German Expressionists Ernst Ludwig Kirchner and Otto Müller, whose nude female bathers fetched a record £2.1 million.
While the watchword in 2009 was that estimates were being reduced to encourage bidding, that is changing. "Our top lots were not estimated cheaply," says Seydoux.
Russian buying was also evident at Sotheby's, particularly for German Expressionist paintings by Kirchner, Lyonel Feininger and Heinrich Campendonk.
But it was the presence of three works estimated to fetch more than £10 million that dominated proceedings. As well as the Giacometti, a Cézanne sold for £11.8 million and a restituted Klimt landscape easily surpassed its estimate to sell for £29 million. Suggestions that this is just a masterpiece market, however, where lower-value works are left to flounder, were confounded by the day sales in which 85 per cent of the paintings and works on paper in the £10,000-to-£250,000 range found buyers. Works by Picasso, van Dongen, Marc Chagall and Raoul Dufy consistently outperformed estimates.
By and large, modern art is a picture of price stability compared to the more volatile contemporary art market. A 2ft bronze of Rodin's The Kiss, which sold in 2005 for £66,000, and again last week for £433,250, was not an example of rampant inflation. In poor condition when sold in 2005, it was bought by a specialist sculpture dealer who knew it could be restored. The price it fetched last week was in line with other casts from the same edition. While works bought at the height of the boom struggled to recover their costs, those bought earlier generally saw modest gains.
As to the future, the Giacometti price was still not as high as private sales recorded in America in 2006 for a Klimt portrait ($135 million), or a Jackson Pollock 8ft drip painting ($140 million, reportedly to financier David Martinez).
Those sort of prices are still waiting to appear in the auction room. And when they do, after last week's results, who will bet against them happening not in New York, as might have been presumed before, but in London?