What difference do you think a school zone would make in the value of your home?
School zones refer to the restrictions on enrolment and the maximum number of students a school is able to accommodate within a specific area or zone surrounding the school. It means that some schools are only allowed to enroll students who have a permanent address in a certain neighborhood.
Domain’s Annual School Zone Report states that based on prices of properties sold from November 2015 to Oct 2016, the capital gains of properties located in Australia’s catchment areas with the best public schools are five times higher than the average city.
New data from the Real Estate Institute of Victoria reveals that properties located within the catchment of Melbourne’s best-performing public schools deliver six-figure returns to property owners compared with homes in the surrounding area.
REIV CEO Geoff White stated that parents with school-going children prefer to invest their money into the family home or buy in areas zoned for the best performing public schools than pay private school fees.
The Real Estate Institute of Queensland reveals that parents buy into their desired zones years before the enrolment of children. Rob Honeycombe is the Chairman of REIQ, and he said, “It’s all about the brand value. These schools that have built up their reputation, that families decide to really be a member of, can add a great deal to the value a home.”
Aman Singh is the CEO and Founder of Credit Hub. He adds to this statement by saying, “Times have changed in the way children are raised today.” Parents are focusing on finding the right school in a zone that has higher study scores. Parents want to live in the area they prefer and will pay a premium for it.
According to Dr. Nicola Powell of Domain, Chief Data Scientist, property prices near top schools grew at a rate that was higher than the city’s average growth rate. She went on to say that the 10 top growth rates in 2016 were between 18-41%. Sydney’s house prices grew by 1.5% during the same period, while Melbourne’s rose by 7.3%. In the 2016 report, Victorian schools dominated all national top 10 lists.
The conclusion of the article is:
Buyers will continue to be attracted to areas with high-quality amenities and education, including public schools that are performing well. Prices in these areas are expected to rise. CrediHub believes that a good public school can be cheaper than a high-end private school. Parents will save money and ensure a quality education for their children by choosing this option.
These suburbs have a lot of homes in school zones. These areas show a high demand for homes near exceptional public schools.
All buyers should take into consideration the catchment zone since it seems that houses located in good school zones usually command a higher price. If you buy in an area with top schools, regardless of whether you use the school, you will probably also enjoy higher capital gains over time.