Bye-Bye to Bling for Billionaires: Art Sales Have Been Inflated by Super-Rich Collectors Who Didn't Know What to Do with Their Money. Rare Works May Still Command High Prices, but the Era of Mass Production by Celebrity Artists Is Over

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Observers of the Frieze Art Fair and Sotheby's and Christie's evening auctions in London this past weekend witnessed something rather like a freakish car chase in a Hollywood movie. The hero's high-performance luxury sedan had been exceeding the speed limit for at least five years; now the brakes were slammed on and it went into a long, uncontrolled skid that narrowly avoided a dozen collisions with oncoming traffic. In other words, many works failed to sell but, given the economic realities outside the art world, there was still an astonishing amount of buying going on. The car now has a cracked windshield and some ugly dents, but it continues to roll.

This past year the art market has seen some remarkable stunt driving. Despite higher sales totals in early 2008, many insides feel that the market hit its real peak back in May-June 2007, just before the sub-prime crisis struck. In the months since, the market has been thinner and weaker, but it has also been punctuated by dazzlingly expensive sales to Arab royalty and Russian oligarchs buying name artists at devil-maycare prices. The Ukrainian steel magnate Victor Pinchuk purchased Jeff Koons's Hanging Heart for $23.6m last November, and Putin-friendly Roman Abramovich acquired Lucian Freud's Benefit Supervisor Sleeping for $33.6m in May. Both sales set new records for the highest prices paid at auction for works by living artists.

However, rumour has it that the Russians have not bought any significant contemporary work since Damien Hirst's [pounds sterling]111m "Beautiful Inside My Head Forever" sale at Sotheby's last month. On that surreal night, the collectors were bulk-buying,. One bidder, rumoured to be a metals oligarch who had never bought contemporary art before, bought nine of the 56 lots in the evening sale. With their fake diamonds and gold and silver paint, these lots were glittery trophies that shouted "party time".

They are unlikely to appeal to recessionary eyes, however and their provenance could turn out to be unattractive when it comes to resale. Indeed, in the past few weeks, many dealers who never trade in Hirsts report being offered Hirsts works from collectors who either no longer feel there is much kudos in owing work by the artistor are "distress selling" to cover losses in other fields. It would seem Hirst's overproduction(the hundreds of spots, spins and butterflies. cabinets of all kinds, and more than a handful of sharks) feeds a ravenous bull market, but could have a queasy impact in a bear market.

If Christie's evening sale on Sunday 19 October is anything to go by, rarity may enjoy a resurgence. The auction achieved [pounds sterling]32m in total, the second-highest result for a Christie's sale in this slot, but 45 per cent of the works failed to sell. That included three late works by Andy Warhol (the postwar master of overproduction) and two abstract Gerhard Richters(there are a lot of them around).

One little gem, however, did hit the jackpot. Lucian Freud painted only two portraits of Francis Bacon. One was stolen from a Berlin exhibition in 1988 and hasn't been seen since. The other, an unfinished painting from 1956-57, was one of the few works to meet with evident demand. Sitting in the front row of the room, discreetly eyeing the auctioneer, the London based dealer Stephen Ongpin acquired the work for [pounds sterling)5.4m-most likely for a Malaysian businessman who collects both Bacons and Freuds.

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The Sotheby's evening sale on Friday 17 October managed to sell 72 per cent of its lots and attain two record prices, for the Ghanaian-born artist E1 Anatsui and the Leipzig painter Matthias Weisher. The achievement was not without a few compromises, as the sales team had convinced the work's consignors to push their reserve prices below the low estimates. …