Government Secondary Schools have proven to be one of the most important factors in determining where House Prices will rise most.
As data geeks, we regularly build predictive models to determine which suburbs will grow most in value in coming months and years. We analyse demographics, socio-economics, infrastructure projects, development activity, transport options, proximity to hospitals and shops, and many other factors… But in recent years, perhaps the most important predictive variable has been school zones.
Homebuyers and Investors have been paying a hefty premium for properties within key school zones.
We’ve built a database of all secondary schools across Victoria, including Median VCE Scores, % of VCE Scores 40%+, Better Education Rankings, and other factors. Merging with House $ Price performance data leads to some interesting analyses…
This graphs shows how suburbs with top performing Government Secondary Schools have performed over the last few years, compared to Other Suburbs.
On average, Median $ House Prices have grown 60% over the last 5 years in those suburbs with top government secondary schools. That’s significantly higher than the 38% growth seen in other suburbs.
In recent months, the difference in growth rates has shrunk, and even inverted, proving that there are many other factors at play.
Interestingly, primary schools have played an increasingly important role.
For those investors and developers looking to buy in areas that will outperform the market in coming years, we don’t automatically recommend purchasing in suburbs with top state schools – many have already experienced their highest growth rates. And many buyers are realising that the premium spent in buying ‘in the school zone’ can just as easily go towards private school fees.
School zones are important to consider, but it’s best to invest in suburbs with schools that will become Top Performers. Study the trends behind school performance, as opposed to current rankings.
In examining schools’ performances over several years, we’ve identified some which are steadily improving, and will soon be recognised by savvy Homebuyers and Investors. It’s in these suburbs that you’re best to invest in for future capital growth.