For many Australian families, access to a top-performing public school can be just as important as the number of bedrooms or proximity to transport. But new data reveals that the price of buying into these coveted catchments often comes with a big price tag, and not always the capital growth payoff some buyers expect.
According to Cotality, buyers are paying premiums well into the six-figure range, and in one Sydney case, upwards of $1.3 million, just to live within a high-demand school zone.
The biggest discrepancy was recorded across the North Shore, where homes inside the combined catchments of Killara High, Willoughby Girls, and Lindfield Learning Village carried a median value nearly 40 per cent higher than similar properties outside the zones. That translated to a staggering $1.3 million difference.
Melbourne also saw sizeable gaps, with properties in the zones for Princes Hill and University High School commanding a $357,000 premium compared to nearby homes outside the boundary.
Yet while the price differences are real, the long-term capital gains tell a more complicated story.
High entry prices, slower growth
In seven out of nine school catchment clusters studied across Sydney and Melbourne, homes inside the zones were more expensive than comparable out-of-zone properties. Yet in six of those areas, long-term capital growth actually lagged behind.
On the North Shore, despite the $1.3 million premium, homes inside the catchment grew 126 per cent over 15 years, compared to 150 per cent in neighbouring areas just outside the school boundary.
A similar pattern was seen in Melbourne. Properties within the sought-after catchments of Princes Hill and University High saw 82.6 per cent growth over 15 years. Nearby homes outside the zone delivered 106.3 per cent over the same period.
This suggests that while buyers are willing to pay more for access to elite public schools, demand might plateau over time, especially as affordability pressures spill over into adjacent areas.
Why the premium exists
While catchment zones clearly influence price, experts say it’s not all about education.
According to Cotality’s Head of Research, Eliza Owen, the premiums may also reflect factors like proximity to train lines, lifestyle appeal, or the higher average incomes of residents in those suburbs. However, in many cases, it’s parents prioritising education without the recurring cost of private school fees. In that context, the upfront premium may still make financial sense.
Data from Futurity Invest estimates the cost of 13 years of private schooling at around $349,000 per child as of 2022. In Sydney, some private schools charge more than $46,000 per year, placing secondary school tuition alone at close to $276,000.
In contrast, buying into a quality public school catchment could represent a one-off investment. Mortgage repayments may feel steep, but unlike school fees, they tend to reduce in real terms over time due to inflation.
Interestingly, the data also uncovered outliers where homes inside well-known catchments were actually cheaper than their out-of-zone counterparts.
In Sydney, houses in the Cherrybrook Technology High School catchment were $155,000 cheaper than similar homes nearby but outside the zone. In Melbourne, homes inside the Doncaster Secondary College catchment carried a $48,000 discount.
For buyers weighing up whether to pay more to get into a public school zone, the decision is rarely just about capital gains.
Cotality’s Irene Kang suggests that for many young families, the calculation extends beyond housing returns. Saving on school fees over more than a decade could offset the initial premium, especially if the home holds its value or appreciates moderately over time.
