How education can bolster property prices

Posted by Jack Guthrie

There are a number of aspects that must be considered before buying into a market. After all every suburb is different and they hold aspects that can create or reduce property demand. A factor that is often overlooked is proximity to education facilities. Premier universities and schools attract demand from young home buyers and student demographics alike, as they seek to secure an opportunity to study at Australia’s most reputable tertiary institutions.

Young families in particular are becoming increasingly geared towards buying into these premier schooling catchments. Parents are settling within the geographic boundaries of school zones, in attempt to secure the best opportunities for their child’s future. They are following the age old parenting procedure, send your child to a good school, they will get accepted into a good university, get a good job and lead a good life.

Whether it is through the means of buying or renting long term, these hopeful parents are creating pockets of heightened property demand throughout Australian suburbs. Buyers are introducing a disparity between median property prices inside and outside of the respective zones, with the Real Estate Institute Victoria (REIV) finding that in some cases buyers are paying a $400,000 premium compared to equivalent purchases just 1 kilometre away.

This effect has been felt within one of Blue Wealth’s approved suburbs in McKinnon, Victoria. The McKinnon Secondary College is arguably the best high school in Melbourne’s affluent southeast, with some of the highest ATAR results in the state and strong links to Melbourne’s best universities.

As seen below, the catchment is a small geographic area, with low levels of developable land and interest from many young home buyers. Over the 2017/18 fiscal year, the natural laws of supply and demand saw the McKinnon catchment area house prices advance to a level $235,000 higher than the remainder of the suburb.

*Clear – Portion of McKinnon excluded by catchment (median house price $1,455,000)

*Red – School catchment (median house price $1,690,000)

School catchments can play a pivotal role in the growth of property value between suburbs. This is just one element of our real estate market, among many, that must be considered to gain the best results along your investment journey. If leveraged properly school catchments can make a big difference to your portfolio’s rentability and resale strength. At Blue Wealth we aim to bring knowledge such as this to our client’s purchases, ultimately allowing the metrics of the property market to work in their favour.

Posted by Jack Guthrie, on 31st Jul 2018