\nIn today’s show Carolyn Boyd<\/b> from Domain has been looking into the suggestion that buying a property in a good school zone will increase the growth potential of your investment and there\u2019s more tips and advice as well.
\n <\/p>\nTranscript:<\/h4>\n
Kevin:<\/b>\u00a0 A question that comes my way quite often is when buyers are buying a property, if they buy in one of those areas that has good schooling, whether or not that actually adds a premium price. There is good evidence that that is in fact the case, and I know that Carolyn Boyd from Domain has been doing a little bit of research on this.
\nHi, Carolyn.
\nCarolyn:<\/b>\u00a0 Hi, Kevin.
\nKevin:<\/b>\u00a0 A number of agents I\u2019ve spoken to say that there are people who will pay a premium, but it is very general?
\nCarolyn:<\/b>\u00a0 Look, I don\u2019t think it applies to every school zone, but I would say every city in Australia, particularly where schools have zoning \u2013 not every school is zoned, but where there is zoning \u2013 this would certainly apply as there will be pockets in every single city where families will be prepared to pay more to get into that school zone.
\nKevin:<\/b>\u00a0 As you say, Carolyn, there\u2019s not zoning in every cap city, is there?
\nCarolyn:<\/b>\u00a0 No, and you might even find in some capital cities, some schools will be zoned and some won\u2019t, depending on demand for those schools and also depending on the size of the school and the number of classrooms available. But certainly those zoned ones \u2013 there\u2019s always a few, isn\u2019t there, Kevin, wherever you live \u2013 where people really want to get into that school, particularly primary schools, because I think in general, people often prefer to send their children to a public primary school, and you do see more children go off into those private schools for high school.
\nIt\u2019s interesting. I have asked agents, \u201cWhat is the premium? What will people pay extra to get into that zone?\u201d The answer is sometimes it\u2019s not a question of what they\u2019ll pay extra; it\u2019s a question of they\u2019ll buy that house or they won\u2019t. If it\u2019s in the zone, they\u2019ll buy it; if it\u2019s out of the zone, they\u2019re not interested.
\nKevin:<\/b>\u00a0 There are, in fact, some cool schools that offer special curriculum, as well, and that, I guess, adds to it. It seems to me as if it\u2019s not very widespread and it\u2019s not something that should be borne in mind if you\u2019re looking at speculating in property, really.
\nCarolyn:<\/b>\u00a0 No, and I think the thing is some of the premium prices will already be priced in to those school zones. People are already paying that money to get in, so you\u2019re going along to purchase the house where you\u2019re already competing against those families, and you might find you\u2019re better off not to buy in the zone or potentially pick a school that you think is up and coming.
\nBut that\u2019s hard to pick, isn\u2019t it, because often schools are in demand because of the school leadership at the time. Perhaps that particular principal is doing a great job or people think they\u2019re doing a great job. Perhaps they have had a spike in their NAPLAN results, the testing that year three, five, and seven students do, that is reported on the My School websites, and parents do look at that. It\u2019s a number of factors that make these schools in demand.
\nKevin:<\/b>\u00a0 I guess it\u2019s something that mainly owner-occupiers would take into consideration, not so much investors, because for investors, as you rightly point out, a lot of the premium is already in the property and they\u2019re probably not going to be prepared to pay for it.
\nCarolyn:<\/b>\u00a0 That is true. Just one thing from an investment perspective. What it probably does do if you\u2019re buying the type of home that a family would rent, it may mean that it might be a bit easier for you to find tenants within those zones, because many families are quite prepared to go and rent in that zone to get their kids into the school, so that\u2019s something to look at.
\nBut you look at that through the vacancy rates. Is the vacancy rate in this suburb better than the other suburb? You go back to the numbers to have a look at that.
\nKevin:<\/b>\u00a0 Indeed, you do. It always goes back to the numbers, doesn\u2019t it, Carolyn?
\nCarolyn:<\/b>\u00a0 It does, yes.
\nKevin:<\/b>\u00a0 Carolyn Boyd there from Domain.com.au. Thanks for your time, Carolyn. Catch up again soon.
\nCarolyn:<\/b>\u00a0 Thanks, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"
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