Private Schools [Download PDF]
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“One cannot get rid of a good education, nor, unfortunately, of a bad one, which often is such because one has not wanted to defray the expenses of a good one.”
– Denis Diderot, 18th century philosopher, art critic and writer
As a parent, choosing where to send your children for their education is one of the most important decisions you may have to make. In our March issue we found that there was a positive correlation between the performance of a public school and house prices located within that school’s catchment area.
In this report, Secret Agent set out to quantify the benefits of living close to a private school. The aim was to determine whether living near a private school increases the value of property, and if so, by how much.
When splitting the larger sample into smaller, defined regions, our findings show that the premium paid for living close to a private school becomes higher in the East, and lower in the North. In both the defined North regions, having a home located within walking distance to a private school made a smaller difference to buyers, compared to the defined East region.
This difference may be explained by other factors influencing buyers that were not accounted for in the regression model used. These include proximity to shops, parks or other desirable amenities, as well as negative influences, such as high rise buildings and public housing in the vicinity. These influences might have had a bigger effect on houses in the North compared to the East.
Across the East and North regions considered in this report, a house located within 1 km of a private school has a higher sale price. This report confirms that there is not only a price premium if you live within a reputable public school zone, but also if you live near a private school.
As was seen in our public school analysis, there was variability in this premium depending on which particular school the property was closest to.
In the case of private schools, this premium ranged from a minimum of $73,000 in the North-East, to a maximum average premium of $168,000 in a defined section of the East.
When a family is in the market for a new home, they are making an investment in their own future, and that of the next generation. The findings in this report show just how influential quality education can be on the value of houses in Melbourne.