Why has it become vital to buy property before you turn 40? Rental surge is coming again!

Your age will make buying your first property either easier or potentially considerably harder!

If you're in your 30's then you may still have some added benefits, but when you reach your 40's, it becomes harder and here is why. When we are in our 30's we are deemed to have sufficient time within the lenders eyes to pay off our mortgage so by the time you retire you have repaid their investment in you. Yes, a mortgage from a lender is in investment in you as much as it is the property. The key focus of lenders today is a conservative approach to their lending. This will become even further under the magnifying glass as the banking royal commission and APRA tightening the lender in Australia.

In your 40's borrowing a mortgage for your first property is definitely more challenging. Many will have children at this time starting to consume more of the income to provide for their schooling, food consumption and all their interests and activities. At this time of life you're up against a few added hurdles and so lenders are now assessing a higher cost of living associated to these parameters. This means your borrowing capacity may not be as high as it was in your 20's and 30's. Right at the time of life when it becomes vitally important to provide for your future too, it all seems a touch unfair but it is the world we now live in. 

The challenges that many will face in obtaining a mortgage for their first property means we will see a higher number in rentals for longer periods. This in turn will place a strain on rental property demands in Australia cuasing demand to outstrip supply. When we consider the lending tightening in general and the slow down of investment buyers able to purchase under the new restrictions there is no doubt we will see a rental increase surge again causing a further property boom. This will only make property harder to acquire for first property buyers and pushing more and more into their 40's before it becomes a possibility. Unfortunately, if they don't achieve ownership of property by the time they're in the 30's they may never own property and be stuck in the rental trap for life. This appears to be the unintended consequencs of the Banking Royal Commission and APRA tightening of the rules.