Basquiat, who began as a graffiti artist and died at 27 from a heroin overdose, is now the sixth most expensive artist ever.

He has joined a very select club of greats including Picasso, Francis Bacon, Modigliani, Giacometti and Edvard Munch whose work has sold for more than US$110 million.

“The new era of prosperity that the art market has entered is, for the first time in history, driven by contemporary art,” the report adds. “This represents a historic development in art history and an undeniable indicator of art market confidence in living artists.”

Demand for contemporary work was traditionally the weakest part of the art market, but its share has risen fivefold since 2000, Artprice says.

Basquiat’s Untitled (1982), depicting a skull-like head in oil-stick, acrylic and spray paint on canvas, was bought by Japanese billionaire Yusaku Maezawa and was the star lot of the New York auction season in May.

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The hunger to acquire works by Basquiat, whose reputation has been growing steadily since his death in 1988, is far from being the only motor driving contemporary art sales. Overall sales grew nine per cent in the six months to the end of June, says the Artprice report.

“This new dynamic is a result of a gradual transformation of the art market,” says Artprice’s founder Thierry Ehrmann. “Since 2000 collectors have shown a growing interest in works created during the second half of the 20th century and the early 21st century.”

He says part of the reason for the surge in contemporary art was that buyers were “confronted with a rarity of older art”.

“Contemporary art has become an economic marker which is expected to grow exponentially,” he says.

The rise in prices for work by living artists helped drive a 5.3 per cent rise across the whole market, dragging it out of two years of decline.

Artprice says the buoyant US market led the charge with a turnover of US$2.2 billion, up 28 per cent, pushing it narrowly ahead of China where auctions raised US$2 billion.

But China, which now regularly duels with the US for the title of art market superpower, may regain the top spot later in the year “since China usually generates higher turnover in the second half of the year,” according to the new report released last week.

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That said, the Chinese market has been contracting, Artprice says, with signs of a restructuring of the market, though it is convinced that it “remains stable overall”.

“After a large number of records, the country’s art market has posted a healthy correction, belying the recurring fantasy of a speculative bubble,” the report concluded.

It says one of the key market indicators – the “unsold rate” at auctions – has now fallen to the same level that it was when the Chinese market was at its pinnacle in 2013 and 2014.

But some countries were still clearly suffering from the long-term consequences of the financial crisis. Spain posted a dramatic 30 per cent fall in its market, putting it behind Poland, Turkey and Israel in the global rankings.

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Basquiat is not the only artist whose works have hit new heights. A double record for Kandinsky pieces was set at Sotheby’s in London in June, with two paintings from before the first world war going for US$26.8 million and US$42.3 million respectively.