Reuters does a quick once-over on the Contemporary art market and declares it a good place to invest:

Investors battered by a credit crisis could look beyond equities and bonds in their quest for returns: those with a keen eye are beginning to see bargains in contemporary art.

Prices of works by artists born after 1945 have fallen nearly a third since a late-2007 peak, according to widely used market data compiler Artprice, and analysts say this could be a great time to get in.

“It is a very good time indeed to buy contemporary art. You find interesting and high quality works at reasonable prices without the hype of the last years,” said Sydney-based gallery owner Dominik Mersch.

Artprice data shows turnover of contemporary works selling at auction fell to 11 percent of the total in the first half of 2009, from 19 percent over the whole of 2008.

But the odd high-profile sale has underlined the category’s potential: a David Hockney portrait of Betty Freedman sold for $8 million in May, a world record for the artist — and still tipped as a sound investment.

“Whoever bought that work got an absolute total bargain,” said Simon de Pury, chairman of auction house Phillips de Pury & Company, who believes Hockney’s works will follow the pattern set by fellow British painter Francis Bacon, whose prices rocketed after an initial struggle.

Nevertheless, it could still be up to two years before a significant turn in art markets, which tend to recover later than the wider economy, said Patrick Gruhn, owner of Switzerland-based Art Invest.

Discerning Art Investors Train Sights on Post-1945 Art (Reuters)