Until recently, the market for contemporary art enjoyed spectacular growth. At its peak in 2007, the market was worth $65 billion. Whilst the sale at Sotheby's on 15 September 2008 of 56 works of art by Damian Hirst fetched more than £70 million, it appeared to mark the end of the bull market.
Since then the contemporary art market may have shrunk by as much as a quarter. Nevertheless, The Economist suggests that two key factors will facilitate recovery.
Firstly, low inflation (across the industrialised world) will fuel demand, especially for established artists. Secondly, globalisation means that demand will be sustained by non-western investors. Whilst prices for contemporary art remain below their peak, low inflation and increased globalisation will facilitate recovery. The contemporary art market, therefore, is not a suitable candidate for one of Damian Hirst's formaldehyde based installations.
