Recent studies show that public school catchment zones have a major effect on property values in Sydney and Melbourne. That study, conducted by Eliza Owen, the head of residential research at Cotality, is profound. It focused on house prices in nine sought-after school catchment areas. The results reveal that houses located in these zones usually command far greater premiums. Meanwhile, nearly identical properties just across the lines stay relatively affordable.
Findings of the report indicate that in seven out of nine catchments analyzed, residences within school zones are more expensive. These homes go above and beyond the costs of comparable properties in the vicinity. This trend confirms what many prospective buyers have long suspected: desirable school districts come with a steep housing premium.
Families are increasingly willing to invest substantial amounts, sometimes exceeding a million dollars, to secure housing within the catchment zones of top-performing public high schools. In Melbourne, houses found in the catchments of the Princes Hill and University High School attract an astonishing 37.2% premium. That premium jumped up an astonishing $357,000! On Sydney’s North Shore, houses in the catchments of Killara High, Willoughby Girls and Lindfield Learning Village have a median worth almost $1.3 million more. By contrast, properties located just outside of these catchments trail sorely in value.
In marked opposition, the study found outliers. Homes in the catchment of Doncaster Secondary College in Melbourne were priced $48,000 lower than similar homes outside the zone. Homes just outside the catchment area of Sydney’s Cherrybrook Technology High School would be $155,000 less expensive. Conversely, homes just outside this border are more expensive.
In spite of these inflated premiums, the report shows that capital appreciation has not followed suit. In the past 15 years, homes located inside catchment areas increased in value by 82.6% – meanwhile, areas adjacent to these neighborhoods experienced a 106% growth rate. On average, properties located within catchment areas of sought after schools experienced a capital growth of 126% versus 150% in surrounding areas.
… affordability is eroding in the majority of high-demand school districts,” Owen noted. This would likely push more residents to look for homes beyond those catchments. She went on to illustrate how this dynamic might account for overall capital growth declining.
“In many cases, that means the premium has trended lower over time,” – Eliza Owen.
“While that’s a significant upfront cost, it could end up saving families money when compared to paying for private schooling over many years.”
Despite progress, the report highlights how critical school zones are in dictating local housing markets. As Owen summarized, “These premiums may reflect the value placed on getting into top public schools, but it could reflect an array of other factors like proximity to train stations or the high incomes of those living inside the catchment area.”
