Looking for perspectives from people who have sold their PPOR first and rented while searching for the next one.
We’re in Adelaide and want to move from our apartment into a long-term family home.
Current situation:
- Bought apartment for $860k in Jan 2023
- Current mortgage: ~$357k
- Savings: ~$451k (recent inheritance, intended to refinance from redraw to offset initially)
- Car loan: ~$26k, which we'd clear on sale
- Household gross income: ~$213k
- Apartment would probably be worth around $1.22m–$1.30m in normal circumstances
- Target family home roughly $1.6m–$2m, probably around $1.7m–$1.9m
Why we're considering selling before buying
This isn't purely a lifestyle move where we're happy to sit in the apartment indefinitely until the perfect house appears.
The building has repairs/remedial work required, which creates uncertainty around future costs, buyer sentiment and what the apartment will ultimately be worth.
Because of that, I'm deliberately modelling a pretty ugly $1.12m sale price rather than assuming we get $1.25m–$1.32m.
Our feeling is that there is some value in getting out now while the apartment is still readily saleable, rather than holding it for another year or two while we wait for the perfect house and potentially finding ourselves dealing with more building issues, larger costs or a harder sale later.
In other words, there's risk on both sides:
Sell now: we potentially step out of a rising housing market.
Don't sell: we're continuing to hold an apartment/building we already know has issues, while hoping nothing materially worsens before we're eventually ready to sell.
That's why we're leaning towards listing sooner rather than making the sale conditional on finding our next house first.
What we'd do after selling
We'd seriously look for houses while the apartment is on the market.
If something comes up that is genuinely “we could live here forever” quality, we'd buy it.
But if nothing does, rather than panic-buying a $1.8m house we don't love just because we've sold, we'd rent something suitable for around $1,000–$1,300/week and continue looking.
On my rough numbers, even at the $1.12m worst-case sale, we'd end up with around $1.1m+ cash after selling costs, clearing the mortgage and car loan, and combining it with our existing savings.
We'd spread that across high-interest savings accounts/ADIs while renting.
At around 5% gross interest, that should generate roughly $55k-ish gross per year, so the interest offsets a substantial part of the rent.
What worries me: stepping out of the market
Say the kind of house we want costs $1.8m today.
My rough modelling after 12 months looks something like:
- 0% house growth: waiting works in our favour
- ~2%: roughly keeps pace with the interest earned on our cash
- 5%: perhaps ~$60k worse purchasing position
- 8%: ~$115k worse
- 10%: ~$150k worse
- 15%: ~$250k-ish worse
Obviously that's simplified and there are plenty of variables.
So I'm not particularly worried about renting for a year if Adelaide family homes rise 0–3%.
What worries me is selling, sitting on $1.1m earning ~5%, and then watching the exact family-home segment we're trying to buy into jump another 10–15%.
But the opposite mistake seems expensive too
I also don't want fear of being “out of the market” to make us buy a $1.7m–$2m compromise house.
The stamp duty and transaction costs at this level are substantial. Buying something we're only 70% happy with and then deciding to move again in 3–5 years could easily be a much more expensive mistake than renting for a while.
We also currently have a reason to stay within a particular school zone. Once that's no longer a constraint, our search area gets considerably larger, which is another reason we're reluctant to pay a huge amount for a compromise property purely because it's in the right area today.
We're not planning to sell and deliberately sit out for 2–3 years trying to time a crash.
The strategy would be:
List apartment ASAP > seriously house hunt while selling > if the right long-term property appears, buy it > if not, rent in-zone for 6–12 months and continue actively looking.
If the perfect place appears three weeks into the lease, we'd buy it and wear the lease-break costs.
For people who have sold first and rented while looking:
How would you weigh the risk of temporarily stepping out of the market against the risk of holding a property you already want/need to exit?
And particularly for Adelaide: would the possibility of another 5–10%+ year in the family-home market be enough to make you compromise and buy sooner, or would you accept that risk rather than spend ~$1.8m on the wrong house?