Data-Driven Investing


How School Zones Affect Property Prices in Melbourne

How School Zones Affect Property Prices in Melbourne 1000 500 Andrew Stone

As data geeks, we regularly build predictive models to determine which suburbs will grow most in value in the coming months and years. We analyse demographics, socioeconomics, 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.

Government Secondary Schools are hugely important in determining where house prices will rise most. And Primary Schools play a significant role, too.

So, why are homeowners and investors paying a hefty premium for properties in key school catchments, and how much are buyers willing to pay?

Let’s find out exactly how school zones affect property prices in Melbourne.

What Are School Zones and Why Do They Impact Property Prices?

Australian Road Speed Sign For School Zone With 40km Limit

For investors or homebuyers without school-aged children, it’s easy to overlook the importance of school zones.

But it’s also easy to understand why these school catchments play a role in price growth.

Said simply, school zones are geographical boundaries around State Government Schools that are determined by the Education Department. 

The easiest way to get into a particular state school is to live within that school’s designated zone.

In fact, entry into the local public school is considered a right and is pretty much guaranteed.

If you live outside a school’s designated zone, you can still seek enrolment, and you might even get in. However, there is no guarantee, and there will often need to be special circumstances for a child to secure a spot.

As a parent, you can navigate lengthy waitlists and fork out tens of thousands of dollars a year to send your child to a quality private school. Or you can put that money towards a house that guarantees entry to one of the state’s leading public schools.

Now, your child gets a quality education, and you get a family home in an in-demand area.

And that’s what it’s all about… demand. Many parents want to live in popular school zones, but the neighbourhoods within those zones are invariably well-established. Demand for properties is high, but there’s not a whole lot of spare land available.

The only way to get into the area is to buy an established property, and this demand contributes to higher median price growth compared to properties in other suburbs.

School zones only apply to state schools, but other schools may work in similar ways. For example, Catholic Secondary Schools often prioritise students from nearby Catholic Primary Schools.

School Zones and House Prices: Digging into the Data

Now that we understand the why of school zones, let’s see what the stats say.

We’ve built a database of all secondary schools across Victoria, including data points such as Median VCE Scores, % of VCE Scores 40%+, Education Rankings, and other factors.

Merging this data with House $ Price performance data leads to some interesting analyses.

This graph shows how suburbs with top-performing Government Secondary Schools have performed over the last few years compared to Other Suburbs. 

Change in median house prices - suburbs with and without top government schools

On average, Median $ House Prices grew significantly more in those suburbs with top government secondary schools between January 2013 and May 2015.

However, at several points, the difference in growth rates shrunk, proving that there are many other factors at play.

The data might be a few years old, but the story is the same in today’s market.

Primary Schools Are Playing an Increasingly Important Role

We’ve talked a lot about Secondary School Catchments, but over the last few years, our Melbourne property investment advisors have also been keeping a close eye on public primary schools. 

Now, Domain’s 2023 School Zones Report has named Melbourne the only national capital city where secondary and primary schools have a roughly equal influence on price growth.

As a property investor in Melbourne, in-demand Primary School Catchment Zones should also be on your radar.

Advice for Investors: Should I Buy in a Premium School Zone?

Three wooden blocks with the worlds "Rea; Estate Investor" in front of a wooden house

For investors and developers looking to buy in areas that will outperform the property market in the coming years, targeting preferred school zones may be a good idea.

However, we don’t automatically recommend purchasing in suburbs with top public schools.

Here are the reasons why school zones are important to consider when investing:

  • There is a direct correlation between coveted school catchments and faster median house price growth
  • There can be strong tenant demand from families who want to live in certain school zones but cannot afford to buy
  • Most desirable school zones are in areas where supply is unlikely to increase, which could contribute to strong long-term capital growth and steady performance for rental properties.

However, looking too closely at school zones could be an investor’s downfall:

  • Many suburbs in top school zones have already experienced their highest growth rates and are unlikely to be top performers in the future
  • Investors will need to pay a premium for properties in school zones that have been highly regarded for years
  • School zones change over time, and certain investment properties are at risk of being zoned out of the area in the future – resulting in lower prices for those properties
  • Many families are realising that the hundreds of thousands spent on buying or renting in the ‘right school zone’ can go towards paying private school fees instead
  • Investing in real estate based solely on school zones and nearby school performance is highly risky. Performance is not guaranteed, and without multiple ways to drive demand and property price growth, your investment is vulnerable. 

Final Thoughts

School zones are important to consider, but when thinking of schools, it’s best to think ahead. You want to invest in suburbs with schools that will become Top Performers, not necessarily the ones that are already at the top of their game.

To find these schools, you need to study the trends behind school performance, as opposed to current rankings.

At Property Analytics, we’ve kept a close eye on school performances over several years, and we’ve identified certain schools that are steadily improving but are yet to be widely recognised by savvy homebuyers and investors.

Of course, these suburbs offer more than just an up-and-coming school zone, and the properties that we’re targeting in these areas meet all our investing fundamentals.

If you want to learn how to invest in these suburbs for future capital growth, reach out to Property Analytics for a one-on-one consultation. We’re buyer’s advocates for investors and developers in Melbourne, securing high-value properties in areas like Kew, Thornbury, and throughout the city.

Our proven process for buying investment properties and development sites will set you up for success.

View of Melbourne suburbs with CBD skyscrapers in the distance

The Speediest Melbourne Suburbs for Real Estate Sales

The Speediest Melbourne Suburbs for Real Estate Sales 1000 750 Andrew Stone

Articles about “the fastest-selling suburbs” are a dime a dozen. Everyone loves a list, and prospective investors are always interested in new opportunities.

But there is one thing that these articles rarely tell you. What exactly can we read into a list of fastest-selling suburbs? Should we be buying them or running a mile? Is the data significant or just interesting market dynamics at play?

That’s what our Melbourne property investment advisors are here to tell you.

Here are the speediest suburbs for real estate sales in Melbourne and what the data means (if anything).

Let’s Start with the 14 Fastest-Moving Suburbs in Melbourne

How do you determine the fastest-selling suburbs across Melbourne?

In short, you look at all the houses that have sold in each of Greater Melbourne’s 1025 suburbs. Then you determine how many days each property was on the market.

Finally, you put all that data together to determine the suburbs with the fewest Median Days On Market.

All that number crunching gives us this list:

  1. Langwarrin
  2. Kilsyth South
  3. Coolaroo
  4. Doreen
  5. Junction Village
  6. Carrum Downs
  7. Skye
  8. Bayswater North
  9. Blind Bight
  10. The Basin
  11. Cranbourne West
  12. Derrimut
  13. Heathmont
  14. Chelsea Heights

In the graph below, you can see how quickly properties in these areas sell compared to other suburbs in Melbourne.

Median Days on Market for Houses Sold over the Last 12 Months in Melbourne - Fastest to slowest selling

As you can see, properties in the fastest-selling Melbourne suburbs stay on the market for just 17 days, while houses in the slowest-selling suburbs hang around for 64 days, almost four times as long.

When We Look at Our List of 14 Suburbs, the Characteristics Are Reasonably Clear

These 14 Locations Are Primarily Outer Suburbs

From Doreen to Cranbourne West, the fastest-moving suburbs are consistently further from the CBD, with many being located in the outer eastern suburbs.

Average Distance to the Melbourne CBD in Kilometres - Fastest selling to slowest selling properties

On average, the fastest-selling suburbs are twice as far from the City Centre as the slowest-selling suburbs.

Capital Appreciation Is Stable While Median Sale Prices Are Lower

In the fastest-selling Melbourne suburbs, property values are holding up well despite downturns.

% Change in Median House Prices Over the Last 5 Years: Fastest selling suburbs vs Melbourne-wide average

The increase in median house prices in the past 5 years is 31% in the fastest-moving areas compared to the Melbourne-wide average of 21% over 5 years.

However, property prices in our list of 14 suburbs are significantly lower than the Melbourne average.

Median House Price Over the Last 12 Months: Fastest selling suburbs vs Melbourne-wide average

These outer suburbs may offer stability and greater liquidity, but the median price point is almost half a million dollars lower.

Other Key Stats About the Fastest-Selling Suburbs

In Melbourne’s faster-selling suburbs, there is a higher proportion of detached houses. An average of 11% of the properties are townhouses or units compared to 26.4% Melbourne-wide. 

There are also 10% fewer rental properties in the fastest-selling suburbs compared to the Melbourne-wide average. 

Houses listed for sale in Melbourne are down across the board, but there is a greater Year on Year decline in listings across the 14 fastest suburbs.

YoY % Change in Houses Listed for Sale: Fasted selling suburbs vs Melbourne-wide average

Interpreting the Data: Is Fastest Always Best?

Now we know all about the popular suburbs that spend the least average time on market, but what does it all mean?

My take is that the lower median house price of these outer suburbs has helped to keep purchaser demand – and therefore capital appreciation – fairly stable, even during recent downturns.

Many of Melbourne’s fastest-selling suburbs are being snapped up by Aussie buyers looking for fully detached family homes, with third-generation Australians being pretty active in this market.

If you’re looking for something similar as an owner-occupier and any of the above suburbs have been on your radar, there are plenty of opportunities to be had. While the number of listings is down almost 7%, the short average on-market time shows that hungry buyers won’t necessarily have to wait long for a place to call home. 

But for long-term investment and development, faster does not equal better.

These sections of the housing market have lower days on market figures because they are lower-value suburbs in terms of price range, not because savvy investors are snapping up opportunities in an instant.

The properties you want to target for investing and development are not necessarily the fastest-selling homes, but high-value acquisitions with generous land content, value-add opportunities, and proximity to important amenities and infrastructure.

As buyers advocates serving Kew East, Kew, Doncaster, and other in-demand locations, Property Analytics can help you separate interesting market dynamics from statistical gold. Our proven process ensures you only invest in properties and developments with the highest capital growth potential.

Understand Market Conditions with Our Property Investing Experts

Aerial Photo Of Contemporary Houses In Suburban Melbourne

My name is Andrew Stone and my business is high-value property investing and developing.

If you want to leverage the best proprietary data and analysis to help you find a high-value investment, partner with Property Analytics. 

As a buyers agent working in areas like Brunswick, Ivanhoe, and Templestowe, I combine on-the-ground industry knowledge and contacts with historical data and emerging trends.

Want to track down the data that really matters in the Melbourne housing market? Find and secure feasibility-tested investment properties and development sites with Property Analytics. 

Model house with money on one side and a calculator on the other

Capital Growth vs Rental Yield: Which Strategy Should You Choose?

Capital Growth vs Rental Yield: Which Strategy Should You Choose? 1000 438 Andrew Stone
3D rendering of gold and silver gears with the words real estate investment

Some people invest in property to generate rental yield and increase their monthly income. Others invest to build long-term wealth, and they do this by targeting properties that are likely to generate capital gains.

One person looks for “positive cash flow properties” while the other is willing to accept “negatively geared properties”.

At Property Analytics, we know that long-term wealth is best created through asset appreciation, not through positive cash flow. Our best advice for clients is to purchase the property that will grow most in value over time

In other words, prioritise capital growth over rental yield.

What… that’s not enough info for you?

Read on for key reasons why our Melbourne property investment advisors put capital growth first.

It’s Land That Appreciates in Value Over Time, Not Dwellings

Even the best brick-and-mortar dwellings will depreciate in value over time if left untouched. That’s why we have depreciation schedules.

But the same thing isn’t true for the right block of land.

Your land can increase in value simply due to supply and demand dynamics. Everyone wants a block of land in certain Melbourne locations, and over time, it becomes harder and harder to get one, sending the value of your property through the roof.

To demonstrate the power of capital growth and this type of strategy, let’s look at the performance of an apartment purchase compared to a house purchase.

Graph showing apartment value and debt-equity position over eight years

This graph shows the performance of an apartment purchased for $600k in April 2013.

An apartment like this could be a great buy if you’re solely focused on a rental yield strategy. With the right features and the right location, you could attract a steady supply of high-paying renters.

Let’s assume this apartment was purchased with $153k in cash. That’s a 20% deposit plus stamp duty and all the legal and financial costs.

Over nearly 9 years, the “Equity Required” section of the graph has reduced from $153k to $91k. This means the investor has generated $62k in rental income.

Over the same period of time, the apartment has experienced capital growth, increasing in value from $600k to $888k.

The rental yield and capital growth combine to put the investor up about $350k. That’s great, but now let’s compare that to a house purchased at the same time for the same price.

Graph showing house value and debt-equity position over eight years

In this case, the “Equity Required” has increased, meaning the investor has contributed about $36k to cover the difference between rental yield and the property’s holding costs.

But the house also increased to $1.179m in value thanks to the land it sits on. So, even with the negative cash flow, the investor is up about $540k.

The apartment investor would be pretty happy with their investment. But think about making about $200k more just by investing in a house.

That’s capital growth – significant passive income that you didn’t need to do anything extra to achieve.

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The Snowball Effect of Capital Growth Strategies

Now that we’ve demonstrated the power of capital growth, let’s take a look at what happens next.

  • Your high capital growth property generates plenty of equity
  • You can use that equity to build your property portfolio by targeting another high-capital-growth investment
  • Or you can choose to use that equity to fund value-adding renovation work on your investment property
  • Meanwhile, you can enjoy tax benefits like negative gearing (to soften the impact of rental losses) and delayed capital gains tax
  • If you need to sell or choose to sell, a property with proven capital growth potential will be more liquid than a property that only has a strong historic rental yield. 

Questions to Ask Yourself Before Pursuing a Capital Growth Strategy

While it is the preferred strategy, capital growth – and property investment in general – is not for everyone. Depending on your financial position and your overall investment goals, capital growth may or may not be for you.

Ask yourself:

  • Can I afford higher entry costs?
  • Can I afford to cover holding costs if the property is not cash flow positive?
  • Am I willing and able to retain the investment property in the long term in order to make significant profits?

The Types of Property to Buy for Capital Growth

Properties that are metropolitan, residential, and titled tend to achieve strong price growth over time.


They are sitting on residential land, and there is a scarcity of residential land available in Melbourne’s suburbs.

Meanwhile, regional, commercial, and multi-unit properties tend to grow at weaker rates.


Because new apartment developments are dime a dozen and these properties aren’t sitting on a block of suburban residential land.

They might be great for generating some rental income, but with so many other apartments flooding the market, they have nothing that will significantly increase their value to offer in the long term.

The Bottom Line on Rental Yield vs Capital Growth for Property Investors

Model house with money on one side and a calculator on the other

If you focus only on rental performance and your investment fails to deliver, you will have nothing to fall back on.

But if you carefully select your investment for capital growth and it doesn’t deliver strong rental returns, you still have the promise of future capital gains and a stronger equity position.

So, if you can afford a higher purchase price and you can budget for ongoing payments to supplement rental losses, we strongly recommend prioritising capital growth.

You will be much better off financially in the long term.

Property Analytics are independent investment advisors and licenced buyers advocates serving Kew East, Kew, Doncaster, Ivanhoe, and all of Metro Melbourne.

From strategy to purchasing, we offer a proven process for securing quality investment properties that offer strong long-term capital growth rates.

Reach out today to discuss your investment goals and start generating real wealth from the Melbourne property market.

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