Overview
- Families are paying up to $1.3 million more for houses inside sought-after public school catchments in Sydney and Melbourne – but that does not always equate to stronger capital growth.
- The largest price gap was seen in Sydney’s leafy North Shore, where homes in the combined catchments of Killara High, Willoughby Girls and Lindfield Learning Village held a median value nearly $1.3 million (or 39.8%) above homes nearby but outside the catchment.
- In Melbourne, the premium for homes in the catchments of Princes Hill and University High School reached $357,000.
- For many households, paying a housing premium in a high-performing public school zone could represent a long-term saving when compared to private school fees.
New analysis from Cotality reveals that families are paying up to $1.3 million more for houses inside sought-after public school catchments in Sydney and Melbourne – but that does not always equate to stronger capital growth.
Using a new custom boundary analysis, Cotality compared property values inside popular public high school catchments with comparable homes in the same suburbs, just outside the zone.
The results confirm what many buyers already suspect: many popular school zones attract a hefty housing premium.
The catch? While they might attract a premium, they don’t always deliver when it comes to capital growth longer term.
“In some of the most in-demand school zones, families are paying hundreds of thousands – and in one case more than a million dollars – more for a house compared to similar houses outside the boundary,” said Eliza Owen, Head of Research at Cotality.
The largest price gap was seen in Sydney’s leafy North Shore, where homes in the combined catchments of Killara High, Willoughby Girls and Lindfield Learning Village held a median value nearly $1.3 million (or 39.8%) above homes nearby but outside the catchment. Despite this, houses in the catchment recorded lower long-term growth of 126.0% over the past 15 years, compared to 150.3% in neighbouring markets.
In Melbourne, the premium for homes in the catchments of Princes Hill and University High School reached $357,000, though capital growth was again weaker than surrounding suburbs – 82.6% compared to 106.1% over 15 years. Of the nine school catchment clusters analysed across Sydney and Melbourne, seven had higher median house values compared to out-of-catchment homes. However, six of these also recorded lower capital growth over the past 15 years.
“These premiums may reflect the value placed on getting into top public schools, but it could also reflect an array of other factors like proximity to train stations, or the high incomes of those living inside the catchment area.” said Ms Owen.
“As affordability has worsened in many good school catchment areas, this may have contributed to a spill-over in demand outside of the zones, leading to lower total capital growth. In many cases that means the premium has trended lower over time.”The report also highlights popular school catchment zones where there was not a premium relative to markets outside the zone in the same suburbs, suggesting good schools don’t always guarantee a premium price.
“Houses in the catchment of the Cherrybrook Technology High School were $155,000 lower than outside the catchment in the same suburbs, while houses in the Doncaster Secondary College catchment were $48,000 lower than those outside the catchment” said Cotality Quantitative Analyst Irene Kang.
Is buying into a public-school catchment cheaper than private education?
For many households, paying a housing premium in a high-performing public school zone could represent a long-term saving when compared to private school fees.
According to Futurity Invest, the average cost of 13 years of private education in Australia was estimated at $349,000 in 2022, with significantly higher costs reported in Sydney and Melbourne. Some leading Sydney private schools charge upwards of $46,000 annually, placing the cost of secondary education alone at around $276,000 per child.
“In six of the nine regions we analysed, the house price premium within public school zones was at least $100,000,” Ms Owen said. “While that’s a significant upfront cost, it could end up saving families money when compared to paying for private schooling over many years.”
Unlike school fees, which tend to rise over time, mortgage repayments often decrease in real terms due to inflation. This makes a one-off investment in location potentially more cost-effective than recurring tuition.
“For young families juggling tough decisions around housing and education, paying the premiums could be worthwhile,” added Ms Kang. “After all, private schooling costs can be in the hundreds of thousands, while a good state school catchment could deliver decent returns from both a housing and educational perspective.”
