Home loan guide / Investing

An educated purchase: buying in a school zone

4 min read

Bailey Underwood

Purchasing in a sought-after school zone can put you top-of-class in a competitive market. Whether a new parent, first-home buyer, or savvy investor, we look at purchasing in school zones.

Mums and Dads

It goes without saying: the property market, and school rankings, can be fickle beasts and will change with the wind. Chances are you’re not the only parent looking to buy in a popular school zone. It may help to avoid buying during the holiday periods or towards the end of the year as this is likely to be when others are making their own moves in line with the school calendar. However, house prices can change for a multitude of reasons, so read the market carefully and purchase at a time most advantageous to your circumstance.

For many parents looking for a family home, the desire to invest in their child’s education is evident and a clear indication that buyers are prepared to pay a premium to be near a well-regarded or top-performing local school.

Don’t know where to start? Our first tip is to check out myschool.edu.au, a government-funded site to help parents rank schools by providing information such as the number of students and teachers, historical NAPLAN results, and where the school ranks on key educational outcomes and level of improvement.

Once you’ve narrowed down possible schools or suburbs, it’s best to get in contact with each school to understand if there are any additional requirements or capped enrolments. A way to ensure your child’s placement could be to consider moving into the school zone, but keep in mind that school zones are periodically reviewed and can sometimes expand or contract. Schools may also review entry eligibility (i.e. sibling enrolments, on-entry options and assessments) which can affect your child’s enrolment, and top-performing teaching staff can move on.

So, now that we know how the location of your property could influence your child’s education choices, there is a lesson to be learned about exactly how influential school zones are on the property market.


Investors

According to Domain’s School Zones Report, there is a premium on properties in prime school catchment areas, sometimes as much as 10% to 20%. Conducting a quick cost analysis can be critical. Seriously evaluate if a potentially larger home loan balance (and the cost of the loan over time) stacks up against paying private school fees for you and your family.

Leading property websites realestate.com and Domain now publish school zone information on their listings. Domain Executive Editor, Stephen Nicholls, agrees that schools are a key consideration for buyers: “Agents say the difference between one side of the street and the other can be over 10%, based purely on schooling”.

Timing is everything. If you have an uncanny knack of being able to see into the future, you could purchase a property in a school zone, rent it out, and move in when your child reaches the appropriate age (sometimes you’re planning for primary and high school, or both, who knows?). And renting out your property can help you manage your finances (i.e. pay down your loan, grow your investment portfolio), help another family get into the zone, and when the time comes, secure a spot for your youngest family members.

Besides proximity to sought-after schools, what else should you look for in an investment property? We've listed 11 things to look for in an investment property here.

Renting

Lacking school spirit? Ultimately, the reality is that for some parents, moving to their desired location to guarantee their child a position in a particular school is not financially possible. Do not fear! There is a loophole: renting. If you live in the zone for at least twelve months, this can provide a more manageable alternative to securing a spot in a strongly performing school.

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