The $110.5 million (S$150.4 million) paid for a painting by New York artist Jean-Michel Basquiat in May was no flash in the pan, according to Artprice.

The stratospheric price “illustrates a profound change in market attitudes”, it said in its half-year report, showing that “collectors are now perfectly willing to pay equivalent sums for contemporary and historical masterpieces alike.”

Basquiat, who began as a graffiti artist and died at 27 from a heroin overdose, is now the sixth most expensive artist ever.

He has joining a very select club of greats including Picasso, Francis Bacon, Modigliani, Giacometti and Edvard Munch whose work has sold for more than $110 million.

(Related: Why Basquiat’s legacy lives on in pop culture, but not museums)

“The new era of prosperity that the art market has entered is, for the first time in history, driven by contemporary art,” a report from the database added.

“This represents a historic development in art history and an undeniable indicator of art market confidence in living artists.”

Demand for contemporary work was traditionally the weakest part of the art market, but its share has risen five-fold since 2000, Artprice said.

The hunger to acquire works by Basquiat, whose reputation has been growing steadily since his death in 1988, is far from being the only motor driving contemporary art sales.

Overall sales grew nine percent in the six months to the end of June, Artprice said.

“This new dynamic is a result of a gradual transformation of the art market,” says index’s founder Thierry Ehrmann. “Since 2000 collectors have shown a growing interest in works created during the second half of the 20th century and the early 21st century.”

US overtakes China

He said part of the reason for the surge in contemporary art was that buyers were “confronted with a rarity of older art.

“Contemporary art has become an economic marker,” Ehrmann added, “which is expected to grow exponentially.”

The rise in prices for work by living artists helped drive a 5.3-percent rise across the whole market, dragging it out of two years of decline.

Artprice said the buoyant US market led the charge with a turnover of $2.2 billion (S$3 billion), up 28 percent, pushing it narrowly ahead of China where auctions raised $2 billion (S$2.7 billion).

But China, which now regularly duels with the US for the title of art market superpower, may regain the top spot later in the year “since China usually generates higher turnover in the second half of the year”, the report said.

That said, the Chinese market has been contracting, Artprice said, with signs of a restructuring of the market.

However, it is convinced that it “remains stable overall”.

(Related: HK billionaire George Wong showcases his art collection in Parkview Group’s building)

“After a large number of records, the country’s art market has posted a healthy correction, belying the recurring fantasy of a speculative bubble,” the report concluded.

It said one of the key market indicators – the “unsold rate” at auctions – has now fallen to the same level that it was when the Chinese market was at its pinnacle in 2013 and 2014.

But some countries were still clearly suffering from the long-term consequences of the financial crisis. Spain posted a dramatic 30 percent fall in its market, putting it behind Poland, Turkey and Israel in the global rankings.

Basquiat is not the only artist whose works have hit new heights. A double record for Kandinsky canvasses was set at Sotheby’s in London in June, with two paintings from before World War I going for $26.8 million and $42.3 million respectively.

fg/ri – AFP

Photo credit: Justin Tallis / AFP