We all know that buying close to schools, shops and transport is considered a plus for property value, but it seems that not just any school will do.
A Real Estate Institute of Victoria (REIV) study is the latest in a growing list to confirm that buying into the catchment of a top performing public school can deliver significant price growth for property owners. The study found the median house price in highly sought-after public-school catchments are up to $400,000 more expensive than homes bordering or outside the catchment area.
For parents with school-age children, it’s hard to put a price on the frustration and disappointment of failing to gain an enrolment in the public school of your choice. It’s for this reason that some parents are prepared to pay a premium to secure a home in an area zoned for the best public schools.
The introduction of the My School website and increased access to school performance metrics has increased the transparency around school performance, setting high-performing schools apart from their lower-ranked counterparts. With private school education costing hundreds of thousands over the lifetime of a child, the benefits of opting for a quality public school are increasingly being realised.
Even for families without children, buying within a sought-after school zone can reap benefits in the form of capital growth and rental returns.
Better in than out
As the parameters of school catchments may change over time, look for property that sits securely within the boundary. If you’re on the border and the catchment area shifts, you may find you’re no longer in the same school zone.
Contact the school directly for a map of the boundary or use websites like Service NSW, School Catchments Qld and Melbourne School Zones to be sure where your property sits in the zone. It’s also worth seeking the school’s final confirmation in case it has a ceiling on enrolments.
Plan for junior and high
Perhaps you’ve bought within the zone of a high-performing primary school, only to find out as your kids grow up that you’re out of the area for a good high school. When house hunting with young kids, it’s hard to imagine that one day they’ll be teenagers, but the reality is that good secondary schools should also be on your property shopping list.
An alternative plan is to sell your existing property when your kids reach school age. If you’ve bought wisely from the start, you can use the equity in your home to sell up and pay the necessary premium to move your family into a desirable high school zone.
Compare the costs
As with any property decision, it pays to do your sums. Compare the home loan interest repayments associated with buying into a preferred school zone versus private school fees. You may find the private school option comes out as the least expensive if you have one child, but not so if there are two or more children in the family.
Make sure you have multiple reasons for why it’s a good idea to buy into an area, not just because it’s in the right school zone. Location factors that make for a wise investment include easy access to major roads, proximity to local transport and shopping, convenience, safety and infrastructure upgrades. Keep in mind school reputations can go downhill over time, particularly with a change in principal, so be sure your property is a good pick with or without a popular school in the neighbourhood.
Knowing how much you can borrow will help narrow down your choices. Talk to your Yellow Brick Road mortgage broker about securing home loan pre-approval before your house hunting begins.
**The information on this article contains general information and does not take into account your personal objectives, financial situation or needs. If you require further information don’t hesitate to contact the branch directly.