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Brighter / / Smart moves when upgrading to your next home

Smart strategies for upgrading from a starter home to your forever home

Upgrading from the first property to your next home isn’t always simple. Here’s how to plan, research and act strategically to get the best outcome.

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The new challenges for next-home buyers

When you bought your first property, the hardest part was probably saving for a deposit. Now, as a next-home buyer (NHB), the challenges look a little different. You might be weighing up whether to upgrade from an apartment to a house or from a smaller home to one that suits a growing family. The big questions often come down to timing: should you buy first or sell first? And if there’s a gap in between, do you need a bridging loan?

Nicola Powell, Domain’s chief of research and economics, says property prices can make these decisions tricky. “If you’re moving to your forever home, that large family home, the financial burden can be quite large. Especially if you’re trying to upgrade from an apartment to a house because there is such a wide price gap between property types.”

Why the market looks different now

Five years ago, your research may have been all about suburbs, lenders and securing your foothold. But the market has shifted significantly since then and relying on old knowledge can leave you underprepared. “Market research is essential,” says Powell. “Market dynamics change and they can change quickly. Doing fresh research ensures you’re making decisions based on today’s conditions and not outdated assumptions.”

Using Domain’s Price Estimates is one way to get a clearer sense of your own buying power. Knowing what your current property could sell for, alongside what your ideal next home is likely to cost, helps you bridge the gap with confidence.

How to be strategic when upgrading

So what’s the smartest way to tackle the process? Treat the upgrade with the same rigour as your very first purchase but add a strategic lens.

  • Know your numbers: Get your home valued and clarify your borrowing power before you start househunting.
  • Consider logistics: Decide whether you’ll sell first or buy first. Each option has pros and cons, from financial security to flexibility.
  • Research suburbs closely: Look at growth trends, local demand and supply and keep an eye on school zones or infrastructure changes if they matter to you.
  • Get pre-approval early: This can be the difference between securing your dream home and missing out. 

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Things you should know

This article provides general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as personal financial product advice. The views expressed by contributors are their own and don’t necessarily reflect the views of CBA. As the information has been provided without considering your objectives, financial situation or needs, you should, before acting on this information, consider what is appropriate for your circumstances, and where appropriate, consider the relevant Target Market Determination, Product Disclosure Statement and Terms and Conditions available on our website. You should also consider whether seeking independent professional legal, tax and financial advice is necessary. Every effort has been taken to ensure the information was correct as at the time of printing but it may be subject to change. No part of the editorial contents may be reproduced or copied in any form without the prior permission and acknowledgement of CBA.