Downturns all have different causes and effects, so the range of experiences for the real estate market is wide. They can range from mild declines affecting a narrow part of the market — such as the region-specific Asia crisis or the dotcom bubble, which affected mainly tech-related office tenants — all the way to a full-blown, synchronised global downswing, such as the global financial crisis (GFC) in 2008.

The average peak-to-trough decline of real capital values in a downturn is 12 percent, but the better-performing sectors and regions typically report declines of 5 percent or less, and in the worst-hit parts of the market, a correction is often more like 30 percent to 40 percent.

Clearly, the downturn caused by the pandemic is still at a relatively early stage, as values peaked in the first quarter of 2020. Unlike the GFC, global policymaking has been highly coordinated and sizable. There is also a notable absence of system-wide excesses of finance, leverage, o