Art prices come crunching down as New York sale falls £75m short

SOTHEBY'S prime New York sale of impressionist and modern paintings saw only nine of 70 pictures and sculptures make their estimates.

The £137million auction ended £75million short of expectation and auctioneer Tobias Meyer soberly admitted: "It's a new world."

More than 1,200 spectators crowded into Sotheby's York Avenue sale room last night to see if Picassos, Renoirs and Modiglianis would continue their starry rise of the last four years, when they climbed as steeply as Wall Street fell. It was not to be.

European buyers sat poleaxed by the dollar's stupendous leap in the last four weeks and American buyers were poleaxed by vast share losses. When Mr Meyer laid down his hammer, most sales had taken place around 20 per cent below the printed estimates.

Triumph mingled with disaster as the market split into high-priced success at the top and damage at every other level. Sotheby's, which had assembled one of its best sales of the last 20 years, was at least consoled by three of the highest art prices of the century.

Kazimir Malevich's Suprematist Composition of 1916 sold for £36.6 million ($60 million), Edvard Munch's erotic Vampire of 1894 made £23.3 million ($38.2 million) and Edgar Degas's ballet pastel Danseuse au Repos £22.6 million ($37 million).

Only one bidder came forward for the rare Malevich, an artist who appears at sales once every 10 years. It was guessed by many to be Chelsea owner Roman Abramovich, the richest Russian in the art game this year.

Mr Abramovich bought Francis Bacon for $86.6 million and Lucian Freud for $36.3 million in New York last May and tried and failed to buy Monet at Christie's in London in June for £40 million.

Full details of his wealth and yacht building emerged in a High Court judgment last week and his ability to add the Malevich to his art collection was not doubted last night. The Malevich was a Russian trophy a picture removed from the Stedelijk Museum in Amsterdam last April and handed back to the Malevich family after descendants claimed the museum had bought it 60 years ago from a person it knew had no right to sell. Spare, austere, it was pioneering Russian abstract art.No less rare was Munch's Vampire, his most celebrated work after The Scream in which a long-tressed redhead kisses a man's neck from above as he kisses her breast. This was the only one of four versions not in a museum, it was at sale for the first time and was vigorously chased by four bidders in the most genuine moment of passion at the auction. Sotheby's expected more than $34 million and got $39 million (with buyer's premium). The audience cheered.

There was open disappointment, however, when Degas's ravishing pastel of a dancer at rest attracted only two bidders. Its price was still £5 million up on the £17.6 million the owner paid in London in 1999 but dealers said it might have fetched more than £30 million six months ago.

A Modigliani portrait estimated at $18 million, a Monet view of Rouen Cathedral in fog at $16 million, a Matisse portrait of a lady at $12 million, an anarchic Cezanne landscape at $8 million and a Van Gogh of a plaster statuette at $7 million all attracted no bids.

"If you are super-rich and you lose 20 per cent of your fortune on Wall Street you are still, all said and done, super-rich," a Bond Street dealer commented. "But if you lose 20 per cent and are worth only a few millions, your money for luxury has been wiped out." The "few millions" sector of the art market took a heavy hit as just over half the 70-lot sale sold under low estimate while 25 pictures found no buyers. But "must-have works" attracted spirited interest a Toulouse-Lautrec black ink sketch of A Masked Ball high among them at £2.8 million.

"What's going to happen is that masterpieces will do perfectly well in the rest of 2008 and 2009 while the mediocre is going to struggle," said Ludmila Lipskaya, a London dealer with a high-spending Russian client list. "The rich are far richer than they were in the last recession 18 years ago and they are also much more liquid, so trophy pictures will continue to be in demand."

Russian pictures numbered high among the few pictures at Sotheby's to make their targets. A trio of Soviet era peasant portraits by Boris Grigoriev sold over expectation at prices up to £2.2 million. Mr Meyer said: "It's a changed market. There's still real competition out there to buy art, but it's competition at lower prices."

Christie's holds its New York Impressionist auction on Thursday.