Why is art so expensive?

Imagine Las Vegas casino owner Steve Wynn's horror when, seven years ago, he accidentally put his elbow through Picasso's painting Le Rêve (The Dream), just as he was about to sell it for an eye-popping $139m.

The painting is one of a series of sensuous portraits of the artist's young mistress Marie-Thérèse Walter, painted in 1932 during their torrid affair. Such works are among the most desirable by Picasso and the price would have set a new high for the artist - but with the painting punctured, the buyer, billionaire hedge fund mogul Steve Cohen, called off the deal.

Now, after a skillful repair, the sale has finally gone through, but this time for $150m, setting a new record for Picasso as well as being the highest price any American collector has ever paid for a work of art. This was a private sale, and at auction records are also being shattered: last year in New York, Edvard Munch's The Scream made almost $120m, Kazinform has learnt from BBC News.

While much of the world is mired in economic gloom, the art market - which regularly sees multi-million prices set for paintings and sculpture - seems to be living in a parallel universe. Le Rêve just one example of how values are spiralling upwards, driven by new money, newly emerged economies, speculation and a fashion for art that overlaps with lifestyle choices and the luxury goods industry.

The seemingly gravity-defying art market also reflects the nature of wealth today. The sheer amount of money in private hands allows billionaires - and there are, at the last count according to Forbes, 1,426 of them spread throughout the world - to indulge in a highly competitive sport to bag the best artworks. And after all, if you can spend nearly $1bn on a yacht, as the Russian billionaire Roman Abramovich is supposed to have spent on his floating palace Eclipse, another few millions for a trophy picture is not that much.

And while you can build another yacht, you can't get a top Manet, Cézanne or Raphael made for you - you have to vie with other collectors when one appears on the market.

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