The Education Premium

February – it’s a time of rejoice for parents around the nation, as young Australian’s reluctantly return to school. Kids are settling back into their schooling life for 2019, whether it be private, public, selective or kindergarten. Considering this, we took the time in this week’s research article to assess how schools can impact property prices.

Recent studies have highlighted the premium that top schools can command throughout our markets. Areas that include either prestigious private/selective schools or Universities have created significant price disparities compared to those outside of catchment regions. The demand generated from top educational facilities is being felt throughout Australia, with some schools creating a price disparity of up to $400,000 in some residential areas. The “education premium” has become a phenomenon to property hunters and first home buyers across the country.

Young families are increasingly geared towards buying proximate to premier schooling catchments. Parents are settling within the geographic boundaries, in the hope of securing the best educational opportunities for their children. They are following the age-old parenting ideology i.e. send your child to a good school, help them get accepted into a good university, get a good job and lead a good life.

Recent studies conducted by SmartPropertyInvestors.com have highlighted major trends emerging from this surge in school demand. A selection of Melbourne premier suburbs property prices buoyed significantly due to closeness to top 10 schools. Blue Wealth clients have invested in a selection of these suburbs, for example, in the McKinnon Secondary College and Camberwell High School catchments, where strong performance is evident.

School/Suburb Median Inside Catchment Median Outside Catchment Premium
Beaumaris Secondary College $1,622,500 $1,210,000 $412,500
Glen Waverley Secondary College $1,621,000 $1,300,000 $321,000
Kew High School $2,001,000 $1,715,000 $286,000
McKinnon Secondary College $1,548,000 $1,390,500 $157,500
Mount Waverley High School $1,310,000 $1,173,000 $137,000
Camberwell High School $2,100,000 $1,980,000 $120,000
Box Hill High School $1,285,750 $1,200,000 $85,750
Frankston High School $770,550 $690,000 $80,550
The University High School $1,395,000 $1,327,500 $67,500

(Source: SmartPropertyInvestor)

Not only have these “education suburbs” attracted premiums from buyers, but growth levels have also been heightened nationally. Brisbane suburbs that include top educational facilities have shown growth rates 13.9% higher than the Brisbane average over the last 5 year period.

Brisbane Region Average Top 10 School Suburbs
Median Price 2013 $453,500 $575,250
Median Price 2018 $546,000 $772,000
$ Change +$92,500 +$197,250
% Increase 20.4% 34.3%

 (Source: MatusikMissive)

This data represents an exciting and unique opportunity for property investors. Leveraging the education premium of significant tertiary facilities can be a worthwhile investment strategy and one that Blue Wealth clients benefit from.


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