Hi again

Thanks for all your comments. A bit more info to help if anyone can give any further advice:

The deposit for land will be from equity in current IP (and a bit of savings so no LMI to pay). Land is 7 acres in Millthorpe NSW – sealed road, electricity, town water, natural gas connected so a pretty good block – and with lots of growth in the area with new hospital and mines don't think we will be paying too much for it.

It would be our long term home when built – our current PPOR is in Orange and rental prices have risen quickly in the last six months due to rental shortage. Again, one of the reasons we are in two minds about keeping or selling is whether rents will continue to go up or when new housing estates are built and demand is softer that there could be risk of over supply of rental housing.  Do others think Orange is likely to keep growing as it has been static since maybe 2006 house price wise until maybe 6 months ago?

Agree with you Luke86 selling seems pointless from an investment point of view because we would come away with really not much to show for 3 years of ownership – but maybe I get to sleep better at night with less debt!

our PPOR if rented (IO loan if IP) would be in the "executive" (real estate agents words) end of the market – good area not far to town, 4 years old, nice home but likely to be a smaller pool of people wanting to rent as would be at the upper end of rental prices for the area.

The more we think about it the more tempting it is to buy land and pay down quickly and wait to build in 3-4 years time. Kids will have finished Uni, wages and (hopefully) existing properties go up in value and we can keep to the "buy and hold" strategy that we initially set out to do without too much financial stress.

Our financial plan was to eventually have enough equity in property to pay off much of our PPOR in 10-15 years time and not have to work to 65 as we could then put more money into super.

Would love to hear what others advise as still not sure what to do…