The number of high-value works of art sold was slashed in half last year, as the total amount spent at global auctions tumbled by over one-fifth.
Sales totalled $12.5 billion (€11.81bn), down 22% from the $16.1bn (€15.21bn) taken in 2015.
Artprice, the world's biggest database for art transactions, revealed in its annual report that the number of works worth more than $10m each fell from 160 to 80.
The biggest deals were done for Claude Monet's Meule ($81.4m) and Lot and his Daughters by Peter Paul Rubens ($58.1m), both sold in Christie's of London. Christie's is the world's leading auction house, its 16,243 lots making a total of $3.05bn last year.
In terms of contemporary art, an untitled work by Jean-Michel Basquiat sold to a Japanese collector for $57.3m.
Claude Monet (1840-1926), Meule, 1891.
China secured its position as "the superpower" of the art world, accounting for the highest total sales in 2016.
It reclaimed the title from the US with an auction turnover total of $4.79bn, a 38% slice of total sales.
The vast majority of sales (81% of turnover) were for traditional calligraphy and painting, according to Artprice's partner firm Artron of China.
The sale of Five Drunken Kings Return on Horses, a 14th century scroll painting by Chinese artist Ren Renfa, was the biggest deal done in the country, changing hands for $45.89m.
The report states:
"In 2015, the Chinese art market underwent a serious readjustment and posted a 26% decrease in turnover, whereas the United States generated its best-ever performance totaling $6.2 billion.
"In 2016, the situation reversed: the Chinese art market stabilised (-2%) while the West suffered a 36% contraction. Posting a total of $3.5 billion from 72,500 lots sold, the USA lost its leader title on the global art market."
Artprice found that the structure of China's art market is "profoundly different" from that of the West:
"Surprisingly, with approximately two-thirds of its artworks remaining unsold, China has a much higher unsold rate than the West. In fact, over the last 10 years this rate has become the norm in China, which nevertheless stands out as the most dynamic market in the world with 277,500 artworks on offer in 2016."
Chinese painter Zhang Daqian was the artist who generated the most money. He was followed by Spain's Pablo Picasso, Chinese watercolourist Qi Baishi, "father" of Chinese contemporary art Wu Guanzhong and Germany's Gerhard Richter.
Looking to the future of the industry, the report said:
"The major adjustments in both the East and West, despite operating in opposite directions, are contributing to a delicate stabilisation of prices around the globe. The outlook is now much more optimistic than last year.
"In 2016 doubts hovering over the market in the first months of the year were relayed by a number of political events that fueled fears of a crisis. However fourth quarter results suggest that the worst disturbances are behind us. The primary risk going forward is that of another major political upheaval that could impact the art market via financial markets."
