Cultural Investment: Record-breaking week of art auctions in the culture capital

The sense of anticipation was tangible when the auction house Sotheby's opened its major sale of contemporary work in London last night, with figures this week already breaking European records. By the end of a night when more than £45m of art was auctioned ­ itself a record for any contemporary art sale in Europe ­ more than £167m worth of art had been sold by the auction house this week.

The top lot in the sale was Peter Doig's White Canoe, which sold to an anonymous bidder in the room for the record price of £5,732,000; more than five times the previous record of £1.28m and a record for a work by a living artist.

For the first time a work by 75-year-old artist Frank Auerbach, who has lived and worked in the same north London studio for almost half a century, sold for more than £1m. The Camden Theatre in the Rain, painted in 1977, sold for £1,924,000, almost four times the estimated price. Among the 11 new artist's records achieved last night was Andreas Gursky's 99 Cent II, Diptych, which sold for £1.7m ­ a record for any photograph sold at auction.

Add in the £89.7m that Christie's achieved with its Impressionist and modern auction on Tuesday evening and its high expectations of a world-record price for a Francis Bacon at its post-war and contemporary sale tonight, and there is clear evidence that the British art market is booming.

New buyers, such as the Russians who have made London their home, have expanded the client base. Add in City whizz-kids and their bonuses, and it is clear there is no shortage of cash. A survey by Barclays Wealth, the wealth-management arm of Barclays, suggested that one in 10 of those receiving bonuses intended to invest in art and antiques, with this week's annual sales the first major opportunity.

In the art world, this excitement becomes self-perpetuating. In the past year or so, dozens of works have come on to the market for the first time in decades because it is clear to their owners that they are likely to secure a good price.

The weakness of the dollar has further persuaded many American owners to consign works to Europe rather than sell on home turf. At least three major American collections were among the highlights of this week's London art auctions, including that of the late Charles R Lachman, a founder of Revlon cosmetics.

One of the Lachman-owned works, Les Deux Soeurs by Pierre-Auguste Renoir, was one of the biggest lots at Sotheby's on Monday night, making £6.8m.

Philip Hook, a Sotheby's specialist, said that London was perceived as an "absolute centre of the world trade... From a buyer's point of view, prices are a little bit daunting, but they now have opportunities that they would never normally have to buy the very best."

Study for a Portrait II, the Bacon that Christie's is selling tonight, for example, has not even been seen in public since 1963 and is one of only a few in the series inspired by Velazquez's Portrait of Pope Innocent X not already in a museum or gallery. It is likely to make about £12m, which would make it the most expensive painting produced since the Second World War.

Charles Dupplin, an art expert at the specialist insurers Hiscox, said this year was picking up where 2006 left off, with art looking a good investment. "Our figures show that prices for contemporary art have risen dramatically by 12 per cent in the last year alone."

There is some evidence that the greater number of buyers is provoking interest in a wider range of art. A spokeswoman for Christie's said there was increasing enthusiasm for German and Austrian art while Sotheby's was surprised this week by the level of interest in 20th-century sculpture with impressive prices for work by Gabo, Modigliani, Lipschitz and Arp.

Three works by the graffiti artist Banksy were sold at Sotheby's yesterday for a total of £170,400, including Bombing Middle England, and another three works are up today with a high estimate of £62,000.