Should You Sell Before You Buy or Buy Before You Sell

One of the most stressful decisions Canterbury vendors face is whether to sell their existing property before buying their next one, or to buy first and then sell. Both approaches carry genuine risks. Here is how to think through the decision for the Canterbury market in 2026.

Selling First - The Lower-Risk Approach

Selling your existing property before purchasing gives you certainty about your net proceeds, eliminates the risk of holding two mortgages simultaneously, and gives you strong negotiating power as a cash buyer for your next purchase. The downside is the possibility of a gap - where you have settled your sale but not yet found or settled your new home. This may mean short-term rental accommodation, staying with family, or negotiating a delayed settlement or licence to occupy with your buyer.

In the current Canterbury market, short-term rentals are tight. Vacancy rates across Christchurch sit at approximately 2.5-3.0%, meaning finding temporary accommodation quickly is not guaranteed. If you are selling first, have a clear plan for your accommodation if your next purchase takes longer than expected.

Buying First - The Higher-Risk Approach

Buying your next home before selling gives you certainty of your destination and eliminates accommodation stress. The risk is that if your sale takes longer than expected, you may end up carrying two mortgages simultaneously - which could be financially stressful or even impossible depending on your lending position. DTI restrictions limit total investor debt to 7x income for more than 20% of new investor lending. For owner-occupiers, carrying two mortgages requires sufficient income and equity to service both. Talk to your mortgage broker before committing to this approach to confirm your lending capacity in a worst-case scenario where both properties are held simultaneously for 60-90 days.

Subject to Sale Conditions

Many Canterbury buyers include a subject to sale condition in their purchase offer - meaning their purchase is conditional on selling their existing home first. This protects the buyer from carrying two properties but makes the offer less attractive to vendors, who face uncertainty about whether the sale will proceed. In a competitive market, subject to sale offers are harder to have accepted. In a balanced market - as Canterbury is in 2026 - vendors are more willing to accept them if the price and other terms are strong.

Bridging Finance

Bridging finance allows you to borrow against your existing property to fund your next purchase while your current home is being sold. It is expensive (higher interest rates than standard mortgages) and banks impose strict criteria around LVR and income serviceability. However, for the right circumstances - where you have strong equity, good income, and high confidence of a quick sale - bridging finance allows you to buy without the uncertainty of subject to sale. Discuss this with your mortgage broker before relying on it as a strategy.

For general information only. Always consult a mortgage adviser and solicitor before making decisions about selling and purchasing simultaneously.