How top schools can drive property prices
When considering what makes a good investment property, it’s vital to identify strong growth drivers. One of the largest drivers is the amenity within a suburb and, more specifically, the level of education facilities available.
Proximity to good private schools and universities is one aspect, however the catchment of public schooling available to the property is another, and potentially of greater importance for suburb choice.
Private schooling and tertiary institutions are open to any individual for application, however public schools only accept applicants within their specific catchment areas (i.e. a certain geographical boundary).
Given the average cost of a private education for one child is $487,093 nationally – a rise of 64% over the past decade – families are increasingly turning to the public school system, with many moving into specific catchment areas of the top performing public schools.
When comparing the $400,000-plus cost per child for private schooling, it can be more financially savvy to purchase or rent a family home in a slightly more expensive suburb, which has good public schooling, particularly for families with multiple children.
As private school fees continue to increase over time, so too will demand for public schooling, and property within the catchment zones of the top performing public schools.
Perth’s top high schools
The above table is a list of the overall top 10 secondary schools in Perth (including both public and private schools) as well as a list of the top 10 public secondary schools. The rating is based from academic performance and social economic performance of the school, according to bettereducation.com.au.
The majority of Perth’s top 10 secondary school comprise private institutions, with Rossmoyne and Willetton Senior High Schools being the only public schools in the list. Both these schools are highly rated and are well regarded as top secondary schools, which have led to an increase in demand for property within these catchment areas.
Willetton S.H.S price premium
Momentum Wealth Research Division performed analysis on the effects of school catchments on property prices. The analysis involved a comparison of prices (sourced from Landgate) for a 4-bedroom, 2-bathroom family house on a 600-900sqm block in two sections of Bull Creek – the main differing factor being the school zone. One portion of the study examined properties within the Leeming Senior High School catchment (8th top public secondary school) whereas the other looked at properties within the Willetton Senior High School zone (the top ranked public secondary school).
The results of the study found that in the 12 months to April 2017, the related properties in the Leeming S.H.S. zone sold for an average price of $675,000, whereas the same type of properties in the Willetton S.H.S. zone transacted at an average price of $759,000. This is a 12.4% difference on the average price. When increasing the sample size to transactions in the past 3 years from, April 2014 to April 2017, the price differential in the two zones was 7.94%.
School catchment zones play a prominent role in suburb pricing and this will continue to be the case in the future. As such, it’s important to understand the various school catchment zones when searching for a potential investment property as this could have a large impact on its future rental and price performance.
Suburbs boasting highly rated public schools tend to comprise more family-orientated demographics and feature larger houses with multiple bathrooms as well as many older, refurbished homes with well-maintained gardens.
This adds to streetscape and general aesthetics of the area, which further helps to buoy prices in the suburb.
School zones very rarely change, but in such circumstances when they are altered, it’s important to understand the areas that will benefit most, which may provide opportunities for investors.
Schooling is just one factor in capital growth forecasting, however in areas where it is one of the main drivers, such as Willetton, it can play a key role in driving demand and subsequently, price growth.