Has This Been One of the Most Defining Years for Property Since the GFC?

It's been a hell of a year for us poor folk in property, hasn't it?

For the vast majority of the industry, we entered the year with a rather dark cloud hanging over our heads.

Sydney and Melbourne were leading the country down a slippery slope in residential housing prices and the rest of the country was holding their breath in anticipation of how low the bottom would go.

The Opal Tower incident over Christmas signalled the first signs of “cracking” hitting the media in the industry's battle with building quality issues.

We also returned from summer holidays with the shadow of a royal commission into banking looming over the broader economy.

By the end of February, most of us were asking ourselves: are we destined for the first recession in three decades or will the Australian economy—and property sector—defy history to record another consecutive year of growth?

Commissioner Hayne then released his findings into the banking sector and the political hot potato of bank bashing (most of it largely justifiable) was intensifying with the prospect of a federal election on the immediate horizon.

Enter the federal election campaign and the obligatory “tools down” mentality for the industry.

The industry was weighing up the strong policy and reform agenda of Labor's Bill Shorten with the less complex “business as usual” agenda of the unelected incumbent prime minister Scott Morrison.

Big infrastructure was on the table for both parties, with significant reforms to negative gearing, superannuation and franking credits proposed by the favourite Shorten.

To nearly everyone's surprise, “Scomo” pulled off one of the most unexpected victories in Australian political history and, as they say, the rest is history.

For most across the industry, there was an immediate sigh of relief following the federal election result with the certainty of 'business as usual' and the uncertainty of major tax reform for property off the table for now.

Author's note: I make no comment on the importance of these policy reforms, for now. (Yeah I know, cop out!)

With a bit of wind in our sail, the industry dusted themselves off and started calling for some relief from the banking sector, in the form of both interest rate cuts from the Reserve Bank and relaxations to borrowing limits from the Australian Prudential Regulatory Authority.

Whilst our industry was indulging in the challenges of the market, the rest of the country was suffering from one of the worst droughts on record.

With no relief in sight for the farmers, the industry was boosted with a mid-year interest rate cut which was promptly followed by changes to the borrowing caps imposed on Australian banks by the regulator and then a second interest rate cut in October.

And like a moth to the flame, the resilient residential market in Sydney and Melbourne—followed by most of the country—started to turn around from the middle of the year to finish the year with one of the sharpest declines and subsequent recoveries in Australian history.

It has been a remarkable year for those that live and breath property.

I don't think any pundit out there could have predicted how the events of the year transpired.

It's been a year of surprises—many of them painful, many of them pleasant.

However, we sit here with only weeks remaining in the working year with the same question on our lips: are we destined for the first recession in three decades or will the Australian economy—and property sector—defy history to record another consecutive year of growth?