Financial worries loom over London art extravaganza

The art world descends on London this week for a packed calendar of fairs and sales, and the talk over cocktails and canapes will centre on whether financial turmoil is about to end the art market's gravity-defying boom. Values for contemporary art have set new records over the last year, shaking off US subprime mortgage woes and the subsequent slide in values of property, stocks and oil.
But the severity of more recent events on money and equity exchanges around the world, and the crisis hitting the banking sector, mean experts are more cautious about the outlook for high-end art than they have been for several years. "I think it is probably a reason to be more pessimistic - because the gravity of events has been of such a magnitude," said Anders Petterson, founder of ArtTactic which tracks confidence in the art market.
"The crisis up until recently was hurting but was not really painful. In the last couple of weeks it has become painful." Auction houses Sotheby's and Christie's are still confident that their October sales, which are held to coincide with the giant Frieze contemporary art fair in London every autumn, will survive the financial crisis.
"We have some incredible works coming to auction, some of which have been in private collections for 40 years," said Pilar Ordovas, head of post war and contemporary art at Christie's London. "The feedback is very strong and we remain confident." She believes more investors are looking at the art market as a possible safe-haven for their millions at a time when money is at risk elsewhere.
"It has proven itself to be a very good and very safe investment. At the top end things are going to retain their value at a time when other investments are less stable." Doomsayers have been predicting the art market bubble would burst for years, yet week in, week out, events in salerooms around the world have proved them wrong.
Cracks in the edifice have begun to show, however, most notably Sotheby's Asian art sales in Hong Kong this month which raised only around half the expected total, a symbolic setback for a sector of the market that has soared in recent years. A major factor behind art price rises this decade has been the increase in interest from collectors in Russia, the Middle East, India and the Far East, reflecting emerging market and oil wealth and the prestige connected with owning rare masterpieces.