Can schools effect the price of real-estate? Yes they can.
In real-estate, supply, demand and government policy or zoning cause real-estate to go up or down.
I have mentioned previously that Sydney’s Upper North Shore Property Market is all about schools (see my blog on The Sydney Upper North Shore Property Market published in October 2014). It is one of the main drivers of prices and why people come to the area.
Let me provide a key example of how a school and government policy along with supply and demand can effect real-estate prices…
In 1991 Gifted and Talented (GATS) classes were implemented at St Ives North Public School for years 3 to year 6.
As a parent myself, I can understand how we believe our children can have above average intelligence….now whether it is true or not is a different story! Nevertheless we endeavour to do our best to send our children to the school that can offer them great opportunity such as the St Ives North Public School – whether it be in zone or out of zone. Demand. Our children may not make it into the class, but at very least we believe if they are enrolled in the school there is always hope they might just get in the class next year or be influenced by those attending.
More demand comes when out of zone families catch wind that there is a great school that offers the Gifted and Talented classes and they start coming from all over the place. Families looking to buy real-estate on Sydney’s Upper North Shore are usually well educated, so that means they research. They soon discover this great primary school and start buying in the area.
Now the fun really begins when the cashed up overseas buyers discover the benefits of such a special school program and start paying big dollars. In 2013/14 these buyers pushed prices in the catchment area to a spread/premium of 10% above other parts of St Ives. In 2015 the spread seems to have come back with other parts of St Ives starting to experience similar prices.The important note is that one of the main drivers initially in the St Ives residential property market was the St Ives North Public School..
And even more so, St Ives out-performed property in Turramurra and Pymble until momentum caught hold of the market. The interesting twist to this story is that according to a recent article published in The Sydney Morning Herald the school has reached close to capacity and no more outside area students will be accepted. This new policy change will limit supply of education and should keep demand for properties in the catchment area to a premium. So policy, demand and supply is in control, happy days for those residents in the catchment area.
This is not the first time I have witnessed this phenomenon.
In the late 1980’s East Killara experienced a very similar rise in real-estate like St Ives. This was due to Killara High School causing a surge in demand for properties – and guess who drove that market, the same overseas buyers. I must say that when that cycle finished, East Killara did suffer some of the biggest price falls in Ku-ring-gai.