Though recession has had an impact on the art market worldwide, analysts see it recovering towards the end of 2010.

Discussing the impact of recession on the art market, Mathew Girling, CEO, Bonhams, Europe and Middle East, told Emirates Business: "Art is a discerning expense, it is not a necessity. You buy it only as a passion when the rest of the commitments have been met, thus it has taken a hit during the current recession.

"In fact, during the past few months there have been a few distress sales of old art pieces in the United States and Europe. And these were not just individuals who sold their art, companies also offloaded their collections.

"Companies bought art when the going was good, both to boost their image and as an investment, but when the recession came knocking, the finance directors started seeing the collection as an unnecessary overhead and decided to offload it."

He said: "Distress sales are going to happen until the first six months of 2010, especially in the US, where the Madoff investment scandal has wiped out many personal fortunes and people will have to sell.

"The market will recover in the latter half of 2010. It will recover when people feel business and the economy is back on track. Then and only then will they have the confidence to buy art again.

"The art market entered the recession later than any other business and will also recover later. The reason was that most people were in denial when the recession hit and were afraid to admit that things had gone wrong.

"In fact, even during the height of the recession, artworks did well and fetched record prices. But then it hit the art world."

Talking about auction houses, Girling said: "When the art world started to feel the impact of the recession, the auction houses were hurt as well. The reasons were that there were fewer buyers in the market and auction houses depend on people who want to sell their collections.

"During the good days, there was a lot of speculation in the contemporary art market and works were fetching record prices. Now, that speculation has disappeared the market is down.

"If you don't have to sell your art collection to bail yourself out, you will not sell during the recession when prices are low unless you are forced to. Thus, we had to trim our budgets and there were few layoffs in the United States and the United Kingdom offices and we are living within our means."

Patrick Gallagher, Founder, Decoratives and Design, said: "Just like the financial markets, prices at auctions have also gone down. This is because auction houses placed reserves that were too high on the works. And after the downturn estimates were lowered.

"Speculation has gone out of the market, especially the contemporary art market. So, this is a good time for people who want to build their collections."

Talking about the Middle East art market and the impact the recession has had on it, Girling said: "The fledging art market in the Middle East has been hit by recession. It will take a little while to recover from the impact but it will still remain the emerging hub of the art world. All the reasons why the galleries and the auction houses went to the Middle East with their art in the first place have not changed."

Listing the reasons why the Middle East is emerging as the art hub of the world, Gallagher said: "There are many reasons why the Middle East is emerging as the art hub of the world. One of them is that it is more economical for people from Western countries to buy art in the Middle East as the taxation policies in their countries make it very expensive for them to buy art there.

"For example, the UAE's tax-free position is helping it to emerge as the leading art market for the region as expatriates as well as foreign buyers will save on taxes by buying art here.

"Also, the UAE, particularly Dubai has a great locational advantage as it is poised between the East and the West and thus is accessible to everyone. Earlier the artists had to ship their work off to Paris, New York or London, which was very costly and time consuming. Now everyone in the Far East and Asia will find it easier to ship stuff to the UAE." Talking about the art market in Dubai Malini Gulrajani, owner, 1X1 Art Gallery, said: "The art market in Dubai has slowed down due to the downturn. We are not getting the prices that we used to sell at until last year and we are actually holding on to our paintings as we bought them at much higher prices than what we are getting for them right now.

"It is basically a buyers' market as the artists themselves have realised that the art market is not what it was a few months ago.

So, gallery owners have greater negotiation powers with the artists than ever before in terms of pricing. However, the fact remains that there are still buyers in the market. I have some Arab clients who have continued to buy for investments and some homeowners who have big houses and who like to display art there. Then there is a new class of buyers that is emerging and that is the people who are looking for a good deal.

"We have taken this slowdown in our stride and are working harder than ever to expand our markets further so that we are ready to take advantage when the upturn comes.

"In fact, we are having a solo exhibition-cum-sale of one of the UAE's best contemporary artists, Hassan Sharif, this Thursday at our galleries. In Dubai, Islamic and Middle Eastern art is really big and sells a lot."

Girling said: "Despite the downturn, the fact remains that there are still buyers in the market as there is a certain group of people like collectors and connoisseurs who are bitten by the art bug and can't resist a good piece of art going on sale so they will buy.

"In fact, at a recent sale last month in Dubai of artists from the Arab World, Iran, India and Pakistan, I was very encouraged by the turnout as it showed us that there was a return in confidence in the art market in Dubai.

"The region has seemingly weathered the downturn in the economic market and collectors were quite enthusiastic to bid for the works of art we had on offer. I am optimistic that in 2010, we shall see the Dubai art market firmly back on the road to recovery.

"The South Asian paintings sold much better than expected. The Tagore Illumination of the Shadow went at 10 times the asking rate. It shows the strong demand in this region. This has given us a platform to work from and we look forward to the next sale in May 2010 with renewed vigour."

Gulrajani said: "Even though the art market in Dubai and the Middle East is already seeing an upturn, it will be years before it reaches the levels it was at before the recession hit the world."

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