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How do school catchment areas impact property prices?

What would you do to provide your child, or future child, a good education? Would you pay $100,000 more to live near the best school in your state?

For many parents the answer is an emphatic YES. That’s why property nearby good schools all over Australia is in extremely hot demand. Let’s take a closer look at how this affects the property markets in the country’s most desirable school catchment areas.

WHAT IS A SCHOOL CATCHMENT AREA?

A school catchment area is a geographic area around a school where you must live to have your child automatically enrolled. The school defines the area in order to limit class numbers and service the needs of children in local neighbourhoods.

While you may be able to get your child into a good public school, if you live outside the catchment area this can be difficult. Your child may have to go on a waiting list or interview with the headmaster, and even then their place won’t be guaranteed.

DO SCHOOL CATCHMENT AREAS RIVE PROPERTY PRICES UP?

School catchment areas can have a massive effect on property prices. In Melbourne, the Real Estate Institute of Victoria (REIV) has found that homes in the catchment area for the most popular state school can go for over $400,000 more than those just outside the catchment zone.

There are also at least 15 other school catchment areas in Melbourne that have average sale prices over $100,000 more than those directly outside the zones. REIV President Robyn Waters says the extra cost of buying a house in a good public school catchment areamay still be cheaper than paying for private school:

“Parents are weighing up the cost savings of sending their children to a good public school rather than spending thousands on fees at a private school, an it’s becoming an increasingly popular option”

While Melbourne may see the most pronounced price increases inside school catchment zones, all other states experience the phenomenon as well.

WHAT SHOULD I CONSIDER WHEN BUYING IN A CATCHMENT AREA?

If you buy on the fringes of a catchment area there’s no guarantee that in a few years you’ll still be inside the area. That’s because school periodically review their catchment areas and shrink them to keep their roll numbers under control.

This also goes the other way – buy on the fringe of a catchment area and there’s a chance the school will expand its zoning to include your property. However, if you’re set on sending your child to a specific school it’s best to play it safe, find out the current zoning area and buy well inside it.

If you can’t afford to buy property in the area, renting is an option. Just keep in mind that the school may require that you’ve lived in the area for at least a year or two before admitting your child for automatic enrolment.

IS BUYING A PROPERTY INVESTMENT IN A SCHOOL CATCHMENT AREA A GOOD IDEA?

School catchment areas are one factor that you should certainly consider when buying an investment property. Most sources say that the property in catchment areas near the most in-demand schools experience a price increase of up to 5% to 15% higher than those outside the zones.

Plus, since there’s a good chance that you’ll secure family tenants if you buy in an area near a good school they may stay for longer, meaning lower turnover and more reliable rental income (with less tenant hassles). With that said, when you buy in a school catchment area you should still ensure that the property ticks all the other boxes that a rental should – the numbers should still work and the property still needs to be a desirable place to live.

If you’re trying to ensure your child gets the best education possible, or if you’re thinking about having children in the near future, you should consider buying in the catchment area of a quality school. If you need a hand, reach out to a real estate agent or a buyer’s agent who can help define the area’s boundaries and find suitable properties within them.

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