How much do schools boost your home’s value?
Public schools that report good results can cause an increase in the value of surrounding properties.
A new working paper from the University of Melbourne has found that property prices in areas of high-performing schools increased on average by 3.6%, the AFR has reported. When looking at house price data from before the My School website launched in 2010, there was increase of about $19,000 in Melbourne suburbs with high-performing schools, compared to a $64,000 increase since the launch.
“Sellers - in particular real estate agents - who are more likely to be aware of the school quality in the neighbourhood than buyers, have an incentive to pass on good news to their clients to increase sales price,” the University of Melbourne’s Institute of Applied Economic and Social Research noted in the paper.
The paper also looked at how having a lower-performing school in a particular area affected property prices, and found there was no equivalent effect, the AFR reported.
“It appears likely that real estate agents have no incentive to pass on bad news to the clients because it would reduce the sales price and therefore their private return through the reduced commission.”