Property market shows parents are willing to pay for high-performing State Schools

There is a report from Domain today about the impact of school catchment areas on house prices (House prices in some Queensland state school zones rise by up to 40 per cent):

“With the new school year just underway, the Domain Group has released its annual school zones report, uncovering the primary and secondary government school catchment zones that have experienced the highest house price growth rates in 2016.

Despite a 3.5 per cent decrease in Brisbane city price growth last year, top performing primary and secondary catchment areas in southeast Queensland have seen between 19 and 40 per cent growth in prices…

…Some of Brisbane’s best performing schools made the top 10 list for catchment zone house price growth, including West End State School (up 21.7 per cent), Brisbane State High School (up 11.1 per cent) and Indooroopilly State High School (up 9.6 per cent).”

The study does not appear to have controlled for the wide range of factors that would affect property prices in any area, but there is no doubt that property prices are affected significantly by school catchment areas, and real estate agents have started using school catchment areas in their marketing of properties. The Brisbane State High and Milton Primary School catchments are particularly popular, for example.

Given the extent to which house prices are being bid up in the catchment areas of desirable schools, it is clear parents have the capacity to make a greater contribution to the costs of running state schools. Currently, existing property owners in desirable catchment areas are capturing a monetary benefit that could be captured by the State Government, through higher parental contribution charges at popular schools, to help it cover the costs of education provision. Of course, the State Government may need to make some concessions for poorer households living in desirable school catchment areas. Ideally, we would have a means-tested school voucher scheme across Australia.

The increasing popularity of high-performing State Schools is partly a reflection of lacklustre economic conditions and large increases in private school fees, which have seen a large slowdown in the growth of private school enrolments (see chart below for the independent schools sector).


For more commentary, see my earlier post on this issue:

St Lucia property owners capturing value from Ironside State School

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