How much would you pay to be near a good school?
It’s a simple rule of buying or renting property that you will need to pay more to be near the facilities that are in high demand. Whether that’s being near a beach, the shops, or a school, desirable features often come with a premium on their price tag.
Despite this, young families are still often willing to shell out a little extra for a good nearby public school – but how much more should you expect to pay to be near a top-performing Melbourne school?
Good schools come with a premium.Quality will cost you
Anyone moving to Melbourne will know there are plenty of good schools around, but the better they are, the more expensive they are to live near. A 2006 study from Harvard and the Australian National University on the subject found that for every 5 per cent increase in test scores, there was a 3.5 per cent increase in the price of houses in the catchment zone of that school.
A decade later, considering the rapid increase in house prices that much of Melbourne has experienced, you can bet that there is an even more obvious premium. The Real Estate Institute of Victoria (REIV) found that the top-ranking schools in Melbourne unsurprisingly had some of the most valuable suburbs surrounding them.
The price of education
“Rather than paying private school fees, parents of school-aged children are increasingly investing that money in the family home.”
Take, for example, University High located in Parkville. The REIV found that homes here had a median price of $1,395,000, so long as they were within the school zone. As soon as the home fell outside the catchment zone, it dropped down to $799,000. That’s a difference of almost $600,000, all for the luxury of being near a good public school.
“Rather than paying private school fees, parents of school-aged children are increasingly investing that money in the family home and buying into areas zoned for top-performing public schools,” explained REIV CEO Geoff White.
Some people may be wondering why people don’t just send their children to a private school instead. The fact is that the costs of education have been rising steadily over the last few years, and one study from AMP found that a private school education can cost up to almost $200,000 per child – three children later, and you’ve already paid that housing premium without the additional capital gains.
With a property near a top-performing public school, you get the best for your kids and for your wallet. If you’re interested in buying in one of these areas, make sure you get in touch with the team at Nelson Alexander to discover your options.
