This milestone seemed to have touched a nerve. In 2006, Emily Kame Kngwarreye's work Earth Creation sold for $1,056,000 at a Lawson-Menzies auction. This was the first indigenous painting to crack the million-dollar barrier. A year later, Clifford Possum Tjapaltjarri's Warlugulong sold for a staggering $2.4 million at a Sotheby's auction in Melbourne. The buyer was the National Gallery of Australia. This record still stands and, with the arrival of the global financial crisis a few months later, is unlikely to be broken in the near future.

Basically, prices at auction crashed, although there is a sense that things might now be improving slowly.

The next major sale of indigenous art should be a litmus test. On May 28, Sotheby's will auction the significant collection of Anthony and Beverly Knight, with 46 works from the early Papunya period (1971 to 1974). This work was first displayed in the early 1980s at their Alcaston restaurants in Collins Street, Melbourne.

They were among the first to appreciate contemporary artists such as Old Tutuma Tjapangati. His 1971 work, One Old Man's Dreaming, is regarded as one of the most important examples of the modern style. Even so, the sale estimate of $120,000 to $180,000 is a far cry from those of the boom period.

One dramatic change in the market is the lack of overseas investors. Beverly Knight recalls European visitors to her restaurant would come in specifically to inspect the Papunya work hanging on her walls.

This was at a time when the National Gallery of Victoria didn't have a permanent display of contemporary Aboriginal art. Such was the overseas interest that Klingender estimates that by 2006, at least half the sales in money terms from Sotheby's Aboriginal auctions came from Europe and the US. At one auction the figure was more than 70 per cent. This was responsible for prices rising tenfold, maybe more, over the previous decade.

Involvement has diminished for a number of reasons. The healthy Australian dollar is one (in the 1980s it was worth about half its present exchange rate).

Another factor is recent restrictions preventing the sale of this style of art overseas. At the time of writing, Sotheby's was finalising which works, if any, from this sale could be exported.

Today, Australian collectors are more likely to be the bidders and given the current limitations, there could be some bargains. One positive for potential buyers is that the works at the May 28 auction were bought well before the resale royalty scheme came into being. This is regarded as another factor affecting sales of contemporary indigenous art. Although Knight says this is probably not the best time to sell this work, chances are a lot more will come on the market soon.