School enrolment zones could impact the value of your property
For some parents, access to sought-after public schools is one of the most valuable things they can gift their children.
But opting to purchase in the right school enrolment zone doesn’t come cheaply, with some state capitals commanding price differentials of more than $550,000 against properties that lie outside of key catchment areas.
All of which is good news of course for those strata investors smart enough to have recognised the potential of purchasing a townhouse, unit or apartment in the right area.
It seems there are investors right across the country who are enjoying the premium that can be added when looking to offload or borrow against strata stock located near prestigious state school catchment areas.
In 2016, data from Domain Group showed homes in Brisbane City saw a 3.5% decrease in the median house price. However, top performing school catchment areas – most of which were located in the western suburbs – saw price growth of between 16% for those in the Sherwood State School catchment area up to a staggering 40% for those property owners fortunate to own housing in the popular Logan Reserve State School catchment.
Likewise, national real estate portal Real Estate View looked specifically at the Victorian market. It found homes within the zone for South Yarra Primary School had a median house price of $2 million in 2018, compared to those one kilometre outside the zone, which were selling for $565,000 cheaper.
Noting the phenomenon was not limited to inner-ring suburbs or just primary or secondary school zones, its data also showed that in Bentleigh East, homes in the Valkstone Primary zone sold for an average of $289,000 more than homes zoned for other local schools, while properties zoned for McKinnon Secondary College had a median price of $1,637,500, while those in the same suburb outside the zone sold for a median of $1.39 million ($247,500 less).
And the news for investors is just in the city that is home to none of the top ten most expensive suburbs in the country.
New research released in July by Monash University academic Daniel Melser shows living in a highly regarded school zone boosts Sydney house prices by as much as 2.5%, with properties in zones with both single-sex and co-educational schools boasting premiums of up to 3.5%.
The research, which analysed the impact of school characteristics on NSW housing markets between 2013 and 2017, also found that weekly rents were found to be 1.2% higher for primary school zones and 0.5% for high schools in the study.
The data reinforces the views of several real estate agents in Adelaide who earlier this year announced that property prices are likely to fall in suburbs out of the zones for two of Adelaide’s most sought-after schools.
The response comes after the South Australian Government’s announcement that students from suburbs including Marleston, Glandore, Black Forest, and Kurralta Park would no longer be able to enrol at Adelaide High School or Adelaide Botanic High School from next year because the schools no longer had enough capacity for increased enrolments.
Investors just need to be mindful that school catchment zones can be reviewed and revised in each state by the department of education, which may have an impact on rental returns.