The world economy has entered into a recession. Wikipedia has even coined a term for it - 'The Great Lockdown'. As dramatic as this term seems, this unprecedented and deeply disturbing turn of events was not predicted by anyone. The World Health Organization (WHO) declared the Coronavirus (COVID-19) outbreak a Public Health Emergency of International Concern on 30 January 2020, classifying it to be a global pandemic. This had led to the largest global lockdown ever in human history, with more than a third of the world's population at the time being placed on lockdown.
As was expected, it has pushed economies of the world into a downward spiral, slowing growth and in some sectors depleting it massively. Speaking on the real estate sector in general, a recession typically causes real estate values to decrease because there is a lower demand for homes or investment properties. It can cause vacancies to increase because people may experience a loss in wages or become unemployed and rental rates decreases because tenants are less likely to rent a new unit or move during this time. Short sales and foreclosures increase because people have difficulty paying their mortgage.
Having said that, this is not the only outcome. There is still an upside to the situation in which real estate investment can be of benefit if exercised with caution and through sound guidance based on strong market knowledge and experience.
The question isn't really how low can prices go during a recession. It's how much real estate you can afford to buy before prices go back up. If one is sure of his/her current financial circumstances and has sufficient funds or liquidity to ride out the storm for a couple of months, they can certainly benefit from the lowering prices and in addition, get a few extra benefits in the bargain. These could be a quick, hassle-free sale with a short negotiation cycle or complimentary commodities to go with the deal.
Moreover, in these uncertain times of the Covid-19 Pandemic and the recession it has spurred, where no one seems to be sure of anything, real estate is and will remain the safest investment option, making it immune to this global crisis. And, Dubai real estate market, as a matter of fact, is faring quite well as opposed to its contemporary global markets of the world. There has been a slump for sure but not as bad as the situation is in other areas of the world. This is owed to the exemplary efforts taken by the government to tackle the pandemic and at the same time manage the economical side-effect it ensues. Also, there is a secret behind Dubai's real estate industry which has and will help it overcome such challenges.
To sum up, there is never a bad time to invest in real estate. All one requires is the intelligence and ability to seize the right opportunity.