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School zones create a house price premium

New Domain research has found school catchment zones continued to add significant premiums onto already spiking property prices across Australia.

The School Zones Report showed annual house prices in 88 per cent of primary school catchment zones and 94 per cent of secondary school catchments have increased.

A school catchment zone is defined as the geographical location where a state school’s core intake of students must live.

Domain’s Chief of Research and Economics, Dr Nicola Powell explained school catchment zones were frequently more expensive than the wider suburbs they were located in.

“It’s astonishing to see that starting on a high base of house prices, some school catchment zones are achieving 10 to 20 per cent more than the suburb they are located in,” Dr Powell said.

“It shows that Australians are prepared to pay for easy access to public schools.”

The top 10 primary and second school catchment zones reported more than 38 per cent house price growth year-on-year (YoY), compared to 29 per cent price growth in 2020.

In 46 per cent of primary and secondary school catchment zones, price growth outperformed the suburb they were located in.

“We know that as part of the property decision-making process, parents and investors consider the geographical location of a potential property in relation to a school catchment zone,” Dr Powell said.

“When people are looking for a home, they’re looking for a lifestyle, and education is a big part of that picture, be it in the inner-city suburbs or the coastal regions of Australia.”

School catchment compared to wider suburb median house prices in capital cities

The top growth rates in school catchment zones across capital cities ranged from 38 to 46 per cent, spread across inner, middle and outer suburban areas. Many of these top catchment areas were in lifestyle locations.

“Due to a shift in lifestyle such as flexible working and ongoing Covid impacts, people are spending more time at home and desire properties that have easy access to beaches and parks,” Dr Powell said.

“House price growth is evident in school catchment zones close to natural environments, making them ideal for families to live in.”

Secondary schools in Sydney and Melbourne had a bigger impact on property prices, compared to primary schools. This contrasts with 2020, when primary school zones were a larger driver of price growth.

Melbourne and Sydney also took the top two spots for the greatest school zone price growth, which was previously held by Perth. Dr Powell suggested this reflected a stronger property market in 2021 for these states.

Melbourne

Kunyung Primary School in Mount Eliza, Melbourne, took the top spot for primary school price growth (45.7 per cent). In 2020, the median house price was $1.3 million, while 2021 saw a median house price of $1.9 million.

The neighbouring Mount Eliza North Primary School came in third place for annual house price growth, with a 37.5 per cent annual change.

“Public school zones can influence property decisions and impact house price movement. Secondary school zones in Melbourne appear to have a slightly bigger impact compared to primary school zones,” Dr Powell noted.

This trend was reversed compared to last year. Dr Powell suggested Melbourne residents were facing financial hurdles when looking to invest in particular school zones, especially amid escalating house prices.

Sydney

Sydney’s Barrenjoey High School in Avalon Beach was the top secondary school for catchment price growth (45 per cent). In 2020, the median school zone price was $1.9 million and it has increased to $2.8 million in 2021.

“Secondary school catchment zones in Sydney had a bigger influence on house prices than primary school catchment zones, a reverse trend compared to last year,” Dr Powell said.

She suggested this could be indicative of private school fees weighing on household budgets amid “escalating house prices, weak wages growth and economic uncertainty”.

Hobart

Hobart had the highest percentage of primary school catchment zones to outperform the suburb they were located in (58 per cent). Comparatively, its percentage for secondary school catchment zones was just 38 per cent.

Brighton Primary School’s catchment zone saw an annual increase in house prices of 35 per cent, while the suburb of Brighton saw an annual change of 17.3 per cent.

The 2021 median school zone price was $405,000 compared to $300,000 in 2020.

Bayview Secondary College in Rokeby saw a school zone annual change of 32.6 per cent, while the suburb of Rokeby’s annual change was just 22.9 per cent.

“Hobart has recorded soaring house prices in recent years,” Dr Powell said.

“Unsurprisingly, all of the primary and secondary school intake areas analysed record positive annual house price growth.

Brisbane

Meanwhile, Brisbane had the largest percentage of secondary school catchment zones to outperform the suburb they were in (56 per cent). The Queensland capital also saw 54 per cent of primary school catchment zones outperform the suburb they were located in.

West End State School in Brisbane’s inner-city circle recorded 41.7 per cent annual house price growth. This was compared to a 19.5 per cent change overall in the wider West End suburb.

The median house price in this school catchment in 2021 was $1.3 million, compared to $935,000 in 2020.

“School catchment zones are paramount for parents when it comes to purchasing a family home,” Dr Powell said.

“In Brisbane, secondary school catchments zones appear to have a more positive impact on house price growth, as a larger portion are outpacing the suburb they are in.”

Schools in outer suburbs Shailer Park, Kilcoy and Cleveland made up the remainder of the top five positions.

“While the top school catchments were dotted across Greater Brisbane and a variety of different price points, affordable outer locations dominated the list,” Dr Powell commented.

Adelaide

In the Allenby Gardens Primary School zone annual house prices rose 32.8 per cent. Comparatively, the wider Allenby Gardens suburb only saw an 11.3 per cent change.

The median house price in the school catchment increased to $660,000 in 2021, up from $497,000 in 2020.

“School catchment areas can have a positive impact on house prices and this begins with primary education choice for families in Adelaide,” Dr Powell said.

“Some school catchment areas in the same suburb or postcode varied in the pace of price movement, highlighting the effect particular school catchment areas can have on property prices.”

Perth

Eastern Hills Senior High School in Mount Helena saw an annual house price growth of 41.9 per cent in the school catchment zone.

In 2021, the median school zone house price was $602,500, while 2020 had a median price of $425,000.

Mount Helena saw a suburb-wide annual change of 14.4 per cent.

“We saw in Perth, house price growth vastly varied with neighbouring local school intake areas providing contrasting outcomes for homeowners,” Dr Powell said.

“Some school intake areas in the same postcode or suburb varied in the pace or direction of price movement.”

The most expensive suburb in Perth’s top five was Dalkeith.

In the Dalkeith Primary School catchment zone, the 2021 median school zone price was $2.56 million. In 2020, the median house price in the school catchment was $1.93 million. This was an annual change of 32.8 per cent.

Canberra

Mawson Primary School was Canberra‘s priority enrolment area with the greatest annual house price growth.

In 2021, it had a median school zone price of $1.07 million, up from $800,000 in 2020, which is a 33.8 per cent annual change.

However, the wider Mawson suburb also saw an annual change of 30.8 per cent.

“There were nine primary and two secondary school priority enrolment areas that have outperformed the suburb price growth, with Belconnen and Tuggeranong weighing heavily in this list, two districts that are renowned for offering affordable houses,” Dr Powell said.

“Families vying to get into certain schools will find that house prices have climbed at a greater rate than the suburb they’re located in, suggesting the positive influence enrolment areas have had on house price growth.” 

Darwin

Millner Primary School’s priority enrolment area had the greatest annual average house price growth at 34.6 per cent. In 2021, the median school zone price was $530,000, which was up from $393,750 the year before.

The wider Millner suburb saw an annual change of 17.4 per cent.

“Darwin house prices have made a strong recovery reaching the highest point in four years,” Dr Powell said.

“This includes tremendous performance across school priority enrolment areas, with 88 per cent of primary and all secondary priority enrolment areas analysed seeing house prices rise over the past year.”

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Jessamy Tredinnick

Jessamy Tredinnick was the news journalist for Elite Agent Magazine from June 2021 - October 2021. For current stories, news alerts or pitches, please email [email protected]