Australian Families Paying Up to $1.3 Million More to Live in Popular School Zones: Report

While house prices in top school catchments are much more expensive, they can offer savings compared to paying high private school fees for young families.

Parents take their children to a primary school in Melbourne, Australia, on October 12, 2020. Daniel Pockett/Getty Images

Some Australian families are paying up to $1.3 million (US$860,000) in premiums for houses in top public school catchments, zones where enrolment is determined by residential address, in Melbourne and Sydney.

While these properties typically offer lower long-term capital growth compared to standard houses, they may offer a cost-effective alternative to paying private school fees.

For families living outside the catchment of a top performing public school, access is not guaranteed, leading some to choose private schooling instead, which can come at a significantly cost over time.

The property platform Cotality has released a new analysis (pdf) that highlights the price differences between houses inside and outside sought-after school zones in Australia’s two most populous cities.

The highest price gap was observed in suburbs surrounding Killara High School, Willoughby Girls High School, and Lindfield Learning Village in Sydney, where median house prices stood at $4,528,548—nearly $1.3 million (39.8 percent) above those outside the catchments.

Despite the high premium, capital growth for these properties was 126 percent over the past 15 years, compared to the 150 percent in nearby areas.

Meanwhile, the highest price difference recorded in Melbourne was $357,000 in the catchments of Princes Hill Secondary College and University High School.

Long-term capital growth in these areas was 82.6 percent over the past 15 years, compared to 106.1 percent in neighbouring markets.

“In some of the most in-demand school zones, families are paying hundreds of thousands—and in one case more than a million dollars—more for a house compared to similar houses outside the boundary,” said Eliza Owen, head of research at Cotality.

“These premiums may reflect the value placed on getting into top public schools, but they could also reflect an array of other factors like proximity to train stations, or the high incomes of those living inside the catchment area.”

However, there are exceptions to these rules. In some popular school zones, house prices were lower than those in nearby areas.

For example, houses near Cherrybrook Technology High School in Sydney were $155,000 below the median prices outside the catchment area.

Similarly, the Doncaster Secondary College catchment in Melbourne reported a lower price gap of $48,000.

“As affordability has worsened in many good school catchment areas, this may have contributed to a spill-over in demand outside of the zones, leading to lower total capital growth,” Owen said.

“In many cases, that means the premium has trended lower over time.”

Buying Houses in Catchment Areas Could Provide Savings For Families

The report also found that, in many cases, buying houses in popular school zones could save young families from expensive private school tuition fees.

Specifically, six of the nine school regions analysed by Cotality had a premium of $100,000 or above for houses inside the catchments.

By comparison, the national average cost of 13 years of private education in Australia was approximately $349,000 in 2022, with even higher figures reported in Sydney and Melbourne, according to data from investment firm Futurity Invest.

“Some of Sydney’s top private secondary schools have reported annual fees of over $46,000 a year, putting the cost of secondary education alone at $276,000,” the report said.

Cotality noted that buying houses in popular school zones was more cost-effective than paying recurring tuition fees, as mortgage payments would decrease in real terms when factoring in inflation.

“For young families juggling tough decisions around housing and education, paying the premiums could be worthwhile,” said Cotality quantitative analyst Irene Kang.

“After all, private schooling costs can be in the hundreds of thousands, while a good state school catchment could deliver decent returns from both a housing and educational perspective.”