When you’re on the hunt for a new property, there are so many things to consider – location, amenities, is there room for a man cave?
What you might not have thought about, particularly if you don’t yet have school-aged kids, is the impact state school zoning can have on property prices.
School zones refer to those lines the education department draws on a map, dictating the catchment area from which a school should draw their students.
Students who live inside the zone must be accepted into the school, and while parents can apply from outside the boundary on special grounds (such as having siblings at the school, or access to a certain sport, language or program not available at other schools) there’s every chance they’ll be knocked back.
Schools can be quite beholden to these zoning regulations, as sometimes their eligibility for funding depends on how strictly they enforce their zone.
And with knock-down and re-builds going on in many inner and middle-ring suburbs, with three or four families now living in townhouses on sites where a single dwelling once stood, some schools are pushed to capacity even when they have tight zoning rules.
With elite private schools around the country costing parents up to (or in excess of) $30,000 per year, per child, it’s understandable that top-performing public schools are in high demand.
Many mums and dads are willing to fork out hundreds of thousands of dollars to lock down an address that guarantees their child entry.
And who can blame them?
By the time their little darling graduates Year 12, between fees, uniforms and extras they will have spend more than half a million dollars on their education – money that could have been used to pay down their mortgage.
In some suburbs, top-ranking public schools actually outperform their private counterparts, so you could argue that the money is better spent on the bricks and mortar.
Does school zoning add a price premium?
The Real Estate Institute of Victoria reports that Melbourne homes in coveted school catchments can sell for up to $600,000 more than those out of zone, with Glenferrie Primary and University High School among the most sought-after.
In Sydney, Neutral Bay Public School (primary) and Hunters Hill High School are popular, while in Brisbane, Sunshine Beach and Sunnybank are the state high schools where parents are vying for a spot.
What if you don't have children?
For those who aren’t concerned about living in the coveted zone, you may be able to snap up a relative bargain in your preferred suburb simply by looking at properties that fall just outside the boundary.
While other house hunters are fighting tooth and nail to secure a home that will ensure their child gains entry into the school of their dreams, you could bag a great property for a fraction of the price a short stroll away.
You’ll also avoid competing with savvy investors who are looking to buy within the zone so they can command premium rents.
Of course as as investor, the scarcity of owning a property in a coveted school zone could mean the difference between above average capital growth and just another "also ran" investment.
However if you’re a parent, or plan to be in the future, it’s important to note that school zones can change – so don’t hang all your hopes on getting your as-yet-unborn child into the local high school, 15 years from now.
And if you’re thinking of selling, investigate the schools in your area and see if you can use them in your marketing.
They don’t even need to be the top performers in the state: as with all things to do with property, just look for the ‘wow’ factor.
If you find out they offer unique programs, like an onsite veggie garden or high achievers program, be sure to include this information when you’re spruiking the property to potential buyers, as it may just be the icing on the cake for a potential buyer.
Kate Forbes is a National Director at Metropole Property Strategists. She has over 20 years of investment experience in financial markets in two continents, is qualified in multiple disciplines and is also a Chartered Financial Analyst (CFA).
She is a regular commentator for Michael Yardney’s Property Update
Read more Expert Advice from Kate here!
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.