Get educated: The relationship between property and schools
July 1, 2014 / Written by Rich Harvey
The saying goes that no man is an island. Replace "man" with "property" and you're even closer to the mark.
A house or unit's surroundings can make or break even the most pristine, state-of-the-art real estate. Find a lovely three-bedder to rent out? That's great, but unless it's near sought-after amenities like public transport and retail shops, chances are your rental yields are going to suffer in comparison to other properties.
Always remember that property doesn't exist in a vacuum - everything from current market trends to the quality of the neighbourhood plays an important role.
One amenity that often rises above all others for a certain kind of buyer is schools.
It's no secret that nearby infrastructure can make a big impact on the value of real estate, and schools are the perfect example. This can also represent a hurdle of sorts if you're looking to buy investment property in Australia.
Proximity to schooling can over-inflate costs
For many parents, nothing's more important than making sure their children receive a quality education. This can lead to huge demand for certain suburbs from parents of school-aged children.
With limited supply and high competition, it's no surprise that suburbs close to good schools can feature overinflated house prices.
However, if you're able to buy in these areas, keep in mind that you can benefit from the capital growth that comes with owning property in an area seeing such high demand. Likewise, you'll have the opportunity for greater rental yields thanks to parents willing to pay more to live in an area close to good schools.
In short, quality schools can establish an area as a great neighbourhood, ensuring demand from buyers and renters for years to come. This can keep you protected from many of the ups and downs that come with fluctuating property cycles.
Schools are important to home seekers the world over
No matter what country you're in, the bond shared between parents and their children is vital, and schools are the perfect manifestation of this.
In Australia, the Daily Telegraph reported that research from Slater & Gordon Conveyancing shows home buyers are willing to overlook the condition of a property if it's close to schools.
"Schools are perhaps the last remnant of community and will remain so and that is the case across generations," Mark McCrindle of McCrindle Research told the Telegraph.
"It's where so many local events are held. And the quality of a school reflects the quality of a neighbourhood and in turn impacts real estate."
Education is also an essential factor for foreign buyers, especially those from China. With more Chinese property buyers coming to Australia, focussing on schools can be a great strategy for buying investment property in Sydney.
According to the latest data from the Australian Bureau of Statistics (ABS), 28 per cent of the population of New South Wales was born overseas. China was the second most popular country of birth for this demographic.
"In June 2013, Australia's population included 6.4 million migrants (28 per cent of the population)," said Bjorn Jarvis, director of demography at the ABS.
"Over the past decade the number of people born overseas who are now living in Australia has increased by 1.7 million people."
The number of Chinese consumers, along with home seekers from other countries, will only continue to grow in Australia.
Investors hoping to appeal to these buyers would be wise to invest in the services of a qualified buyers agent who can help them find real estate in close proximity to schools and other amenities that will serve their overall objectives.