There's a phenomenon happening in Melbourne that doesn't seem to be replicated anywhere else in Australia, and with such ferocity! Highly aspirational parents all over the city are snatching up homes in education hotspots, and it's driving up real estate prices in top Melbourne school zones.
Research from Real Estate Institute of Victoria shows that in some places price differences upwards of $400k are being experienced between areas in and out of the school zone.
Let's explore why it's a good idea to invest in property in a school zone, and which Melbourne secondary school zones are performing the best.
If you have a family, you'll no doubt want to move somewhere which has quality schools.
But what about if you're simply looking for a good investment? Some of the best schools in Melbourne are making a giant impact on real estate performance in their respective areas.
Properties located within school zones tend to be worth much more than properties outside of the school catchment in Melbourne, and this price difference is most noticeable when regarding top performing, highly sought-after schools.
After experiencing a sharp correction over the past year, which has seen annual price growth decline rapidly, the September 2019 quarter has seen levels return to mid-boom prices. This indicates that it's a good time to buy before the market bounces back, and while your money gets you more.
Properties located within school zones tend to be worth much more than properties outside of them in Melbourne.
If you're looking for the best suburbs to invest in Melbourne, targeting your search to areas that include the best high schools in Melbourne is a good strategy. Some experts estimate that there can be a 10-15% premium on those areas, which means that finding properties located where new schools are yet to be built could be very beneficial.
Ensure the property you wish to buy is actually in the school zone - not just the suburb. Calling up the school to find out their boundaries and looking at maps will help.
Here's a list of where to invest in Melbourne based on school zones.
Balwyn North, 3104
This highly sought-after government school is continuously one of Victoria's top performing state schools. In the 2018 VCE, Balwyn High received a median study score of 34.
The strictly zoned school allows for 5% of their intake to come from international fee-paying students. The large sum of money acquired by this program is injected back into building facilities and the employment of highly-trained, specialised staff. While exceptional exam results are achieved, there is also a large focus on student wellbeing.
According to REIV data, in 2018, there was an $80,000 difference in median sale price between properties in and out of the school zone.
A large portion of the area of Balwyn North is covered within the catchment. The median sale price currently sits at $1.6 million, while units are $815,000. Annual price growth has taken a stumble at -17.95% for houses, and rental yields are just 2.1%. As the market recovers to mid-boom levels, particularly in the last quarter, prices are expected to rise so now is a good time to invest in the suburb.
Box Hill, 3128
With a median study score of 34 in the 2018 VCE, the tightly held Box Hill High School zone is coveted by many parents. With a $500,000 upgrade currently underway, the school's focus on gifted learning will only improve.
Properties within the zone in 2018 came with an $85,750 premium compared to those one kilometre from the school catchment in Melbourne's east. Currently, the median sale price in Box Hill is $1.2 million, however, homes directly in the catchment are substantially higher. Property growth is underwhelming at -27.35%, which means there is plenty of potential for prices to grow. Rental yields are 2.2% for houses, and higher for units at 4.6%.
With a $500,000 upgrade currently underway, Box Hill's focus on gifted learning will only improve.
Glen Waverley, 3150
With consistently good exam results and a median study score of 33 in the 2018 VCE, this elite government school consistently outperforms other state schools. It's so highly sought-after that in 2018 there was an outstanding $321,000 premium on zoned properties and no lack of parents scrambling to attain access to this top school in Melbourne.
Glen Waverley has taken a stumble during the property downturn, but there are strong signs of recovery on the horizon. The median house price is at $1.2 million with -8.68% annual growth, while units come with a median price of $788,000 and annual growth is in the positive at 1.03%. Rental yields are 2.3% and 3.3% respectively.
Interestingly, surrounding suburbs just a few kilometres out of the catchment, such as Mulgrave and Notting Hill, are much more affordable at $810,000 and $866,000 respectively. Perhaps an indication of just how much top performing schools are driving real estate prices.
A footstep from Melbourne's CBD, University High School ranks highly year after year. In 2018, the school received a median study score of 33. The school is over 100 years old and specialises in a number of advanced programs, such as science, ethics and project-based learning.
REIV data showed that in 2018, homes situated within the school's catchment zone had an extra $67,500 price tag on them than those outside of the zone.
When it comes to high school zones in Melbourne, Parkville is a good choice. The median house prices in this picturesque suburb is $1.5 million, while units are just $490,000. Annual growth is currently -14.20% for houses and 1.77% for units, while rental yields are fetching 3.1% for houses and a solid 4.6% for units.
In 2018, REIV data revealed homes situated within University High School's catchment zone had an extra $67,500 price tag on them than those outside.
Known for its excellent music faculty and high VCE results, McKinnon Secondary College placed itself in the top three non-selective government schools in Victoria over the past decade, raising house prices in the zone substantially.
There was a $157,500 difference in house prices between those in and out of the highly-regarded school's zone in 2018. There are plans to develop the school into a new high-rise campus, which should only serve to increase its popularity.
In McKinnon itself, median house prices are $1.4 million while unit median prices are $690,000. Annual growth is -18.02% for houses and -5.43% for units while rental yields are 2.4% and 3.9% respectively.
Doncaster East, 3109
East Doncaster Secondary College is providing academic excellence in an area where roughly only 67% of the population actually finish high school. Over the past five years, the school has upped their VCE scores from the state average of 30 up to 32 and have been maintaining this achievement.
In Doncaster East the median house price is $1.1 million, while units are $643,000. Annual growth has been negative for houses at -14.77%, but positive growth is reported in the unit market at 3.80%, while rental yields are 2.5% and 3.9% respectively.
In an area where roughly only 67% of the population finish school, Doncaster East is providing academic excellence and offering opportunistic investment prospects.
Mount Waverley, 3149
Offering a range of excellent programs and extracurricular activities for students, Mount Waverley Secondary College had a median study score of 31 for the 2018 VCE. In the same year, a $137,000 gulf was found between house prices in and out of the school zone.
The median sales price in the suburb of Mount Waverley is $1.2 million for houses, and $848,000 for units. Annual growth is currently -15% and -0.38% respectively, while rental yields are 2.3% for houses and 3.3% for units.
In 2018, a $137,000 gulf was found between house prices in and out of the Mount Waverley Secondary College school zone.
Brighton East, 3187
Brighton Secondary College just seems to be advancing year on year with improving academic results.
Brighton East properties offer more affordability in house prices than in Brighton (by the sea), and a higher percentage of the area is covered by the school zone. This could mean a better opportunity for investment.
The median house price is $1.7 million, while units are $815,000. Annual growth is backward for now at -12.70% for houses and 19.70% for units, but this trend is reflected throughout Melbourne and should be set to recover in 2020. Rental yields are 2.5% and 4% respectively.