There’ll be parties at Frieze – but will there be sales?

Less than two years ago, at the height of the contemporary art boom, galleries and auction houses eagerly fed their produce - art and artists - into the gaping maws of hedge-funders and congratulated themselves on a job well done.

They revelled in the idolation of wealth and celebrated high-profile deals like a kind of public copulation. Artists themselves grew tense whenever a dealer entered the room; collectors played a competitive game with one another, and lucky dealers took commissions from both ends of the deal.

Art was only a few steps from being securitised; and it became a commodity best viewed as a currency for the ultra-wealthy to move capital quietly between tax jurisdictions.

Hopes of a post-summer pick-up have not materialised. Dealers say their shows are sold-out, but of course but they're not. The power has shifted. It's a buyer's market. Inventories are high and the pipeline of new work full. But where is the demand? Even committed collectors are moving cautiously.

Today, collectors start out by demanding 30 per cent off then, in a kind of Moroccan auction, go to 40. Sales are down by as much as 30 per cent by value, 80 by volume. Apart from the occasional high-profile sale of Chinese antiquities, the market shows no sign of returning to anything like its previous, rude health.

None of which bodes well for the Frieze Art Fair opening in London this Thursday.

Not that the artists and dealers at Frieze will say publicly how difficult things have become. Instead, they will speak charmingly of the benefits of their newly chastened circumstances. In this post-Lehman art world, they will tell you how refreshing it is that the work and the creative process, not valuations and sales, are foremost. There'll be parties and possibly sales, too. But definitely a lot of parties.

Privately, dealers say they have no choice but to attend. "Where else are you going to meet new collectors?" offers one. "If you don't go you might as well chop your own legs off."

However, that hasn’t stopped 28 exhibitors from last year's Frieze dropping out (the upcoming Art Basel Miami Beach fair in December may have lost 60). The numbers have been made up with new entrants who previously failed to meet selection criteria. "It's certainly been a rollercoaster year," concedes Matthew Slotover, co-director of Frieze, now in its seventh year.

"It's actually a house of cards," remarks Walter Robinson, editor of the market website Artnet. "Everyone talks a big game because perception is 90 per cent of the deal."

Work on offer at Frieze is likely to be weighted toward the low end of the market with a few crowd-drawers - a late Francis Bacon nude for $9m - at the top. The middle of the market, dealers say, is especially weak. The era of demand for multiples and editions appears to be past; showboat work, often large scale and shiny, has dated quickly and conspicuously.

Frieze's management and curatorial staff have nimbly embraced the shift in temperament.

"Art fairs are about sales," said one New York dealer last week. "You can curate all you want. Start a dialogue. You still need to shift the goods..."

The Frieze Art Fair runs October 15 - 18 ·