Expert Advice by Rich Harvey
If you're on the lookout for Australian investment property, you'll be after homes that will increase in value, of course. Along with getting a piece of real estate in growth areas, picking a home near a school can help up drive up the property's value in years to come. Everyone wants a great education for their kids, and many will pay a premium to ensure this happens.
This is a growing trend as well – data from the Australian Bureau of Statistics (ABS) shows that annual enrolments in NSW non-government schools surged more than 20 per cent in 2014 compared to 2000, while public school enrolments grew less than 1 per cent over the same period. Australia wide, the increase is almost 30 per cent for non-government schools compared to and just over six per cent for government schools.
But as a budding property investor in Australia, how can you make the most of the increase in student numbers?
Location, Location, Location
Growth in non-government school enrolments have long surpassed government enrolments and parents prefer to live nearby to the schools in which their children attend. The increased demand for property near top schools will continue to push up property prices in those areas, with those properties within walking distance to top schools often the most sought-after.
Schools in Sydney's Upper North Shore such as Pymble Ladies' College, Knox Grammar, Lorentto Normanhurst, Abbotsleigh and Barker College helped push up properties local prices and rents in the area above Sydney's average for 2014.
Meanwhile, Sydney Eastern Suburbs maintained their premium due to their proximity to the CBD, beaches and some of Sydney's most prestigious schools including Sydney Grammar, Scots College, Cranbrook, Kincoppal and Kambala. Our team of specialist buyers agents have expert local knowledge about which schools may be the most suitable for your kids – so it's worth asking the locals how each school stacks up.
Reputable local primary schools are also important. According to the ABS, more parents are choosing public primary schools for their children instead of independent schools. In 2014, 69.1 per cent of Australian primary school students were in public schools, up from 68.9 per cent the year before. In NSW, government primary school enrolments grew at over two per cent in 2014 compared to 2013 whilst non-government primary schools only grew a little over one per cent during the same year.
It is therefore important to look at what catchment area you're in when you're looking to buy an investment property as this can affect demand for your property and therefore your return.
Open up to foreign investment
According to data from the Australian government, there were 583,714 full-time enrolments by international students paying full fees over the year to November 2014. That's a 12.3 per cent increase on the previous 12 months, which is significantly above the average growth rate of 5.4 per cent across the preceding decade.
This is indicative of higher foreign investment in Australia, with China and India comprising nearly half of the enrolments in higher education. Essentially, this means the market for rental properties near universities and quality high schools will be on the rise. This offers a great opportunity for positive cashflow property, as you're likely to be able to charge a premium for properties within the catchment of reputable schools or walking distance of major universities.
Student accommodation also on the rise
A recent Property Council of Australia statement welcomed the adaptive reuse of commercial office buildings in Brisbane for student housing, showing further growth in housing for those in education. This could also offer more opportunity for large-scale investment in a property, and is absolutely something to be watched.
Apartments and houses with multiple rooms are very attractive for investors seeking higher yields by renting to students. The major universities in Sydney such as Macquarie University, Sydney University, the University of NSW and University of Western Sydney all have housing precincts adjacent to the campus that are ideal for investors to target.
As for the actual finding of these properties? The negotiation skills and off-market property knowledge that a buyers' agent brings to the table is a sure-fire way of finding great property in these areas.
Managing Director, propertybuyer
This article was written by Rich Harvey, founder and Managing Director of propertybuyer, Sydney & Australia’s most awarded Buyers Agents. Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, everytime. For further details please visit www.propertybuyer.com.au or call +61 2 9975 3311 or 1300 655 615.
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
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