Investing in property within Melbourne’s most sought after public school zones

Posted 8th June, 2017

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JUN 8, 2017 – Heath Thompson

A persuasive reason to invest in capital growth areas is identifying the public school areas with strong growth fundamentals.

Savvy investors are always trying to find value in the property market and with the rapidly changing property legislation, reasons to invest need to be more compelling than ever.

A persuasive reason to invest in capital growth areas is identifying the public school areas with strong growth fundamentals.

As private school tuition fees still continue to soar, which families are now seeing is an out of pocket expense of between $100,000 to $140,000 for a private secondary school education, many parents are opting to buy investment property in the top public school zones and shrewdly investing this hard cash into appreciating property.

“Anyone quick enough to purchase a property near a top tier public school such as McKinnon, Balwyn or Glen Waverley, will almost certainly benefit from a thriving investment which offers premium rent, low vacancy rates and strong capital growth prospects,” says Heath Thompson, Associate Director of Beller Property Group.

Heath goes on to say, “a good point in case is the McKinnon High school zone, that is one of the most prized and prestigious public schools in Melbourne”.

McKinnon High School’s popularity has spurred a flurry of residential developments in its zone. With nearby Claire Street previously only having 11 houses and now has 125 apartments.

“We are currently launching two boutique developments, one in Bentleigh and one in Ormond, and we’ve had strong interest from purchasers making an investment play,” says Heath.

According to Heath, investors are now speculating on the new McKinnon School zone which is already generating significant interest in new development, Ciel, prior to the project being available to the market.

An invisible line rings around the values of properties in the investment zone and those standing outside. The properties included in the investment said circle can increase in value up to 20-25%. A remarkable increase as parents are required to pay a premium to get into these areas in order to capitalize on their investments.

Therefore, purchasers are not only saving on school fees, but also their chosen property will be capitalizing 25% faster than those outside of the school zone.

The State Government has identified a second campus site for one of Victoria’s most popular state schools, McKinnon High School, which will inevitably expand its highlycoveted enrolment zone and most likely boost property values in the area.

Bentleigh MP Nick Staikos says “The potential new campus would address huge enrolment demand in the area as the zone would have to change to accommodate the new campus, which would be located just outside its existing zone”.

“A new campus would also ensure that its existing catchment zone, which is the smallest in the state, did not shrink,” says Staikos.

The sought-after public school, which achieves some of the top VCE results in the state, has already rolled out 34 portable classrooms to accommodate its booming enrolments, which have hit almost 2200 students.

Beller Property Group knows that being in close proximity to schools is important to people looking to buy property. In fact, around 50% of home hunters, and even higher for investors, in the area have said that it matters when making a decision on a property.

“Many purchasers are either moving to accommodate a growing tribe of kids, or for different circumstances need to relocate and therefore the kids need to change schools. What we’re also noticing is the number of overseas and interstate investors keen to buy homes primarily in the vicinity of desired schools,” says Heath
Thompson.

Homes in the McKinnon High School zone can fetch up to $100,000-$150,000 more than similar properties outside the school’s district and parents are paying up to $100-$400 per week more to rent a property in the catchment of McKinnon High School.

If the goal is a quick turnaround, there may be better options on the market. However, if long-term capital growth and attracting potential renters are goals, purchasing property near top ranking schools is among the best decisions an investor could make.

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