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Australian Property Investor Magazine – June 2014

by Dion Besser
May 8, 2014

API MAGAZINE - June 2014

SCHOOL’S OUT: Homes in prestigious public school zones have always been hot property, but are they worth it?


Investors chasing premium rents and capital growth are often paying hundreds of thousands more for houses in Melbourne’s top-ranking school zones compared to almost identical houses in neighbouring suburbs.


Experts tell API this trend is expected to continue for many years to come.


So should investors clamber to get their own piece of real estate in Melbourne’s red-hot school zones? Head of Property Management at Besser & Co, Marcel Dybner, reports there was more demand for houses in McKinnon than in any other inner southeast suburb in 2013.


Dybner worked for a rival southeast Melbourne agency last year and says demand from buyers “wanting to move in so their kids can get into the school” often resulted in sale prices 20 per cent above expectations. He says McKinnon outperformed nearby suburbs including Bentleigh and Ormond, “even though Bentleigh has a much better shopping strip and Ormond is closer to the city”.


“McKinnon is a very small area geographically with limited housing stock and as long as Australians value education, which is virtually guaranteed, this demand isn’t going to end. I know of many families who are so desperate to get their kids into the city’s best public high schools they’re moving to McKinnon, paying premium rent to live there and qualify to go to its local high school,” Dybner says.


“They’re paying $100 or more extra in rent a week (than in a neighbouring suburb) but when you consider this cost opposed to paying $20,000 or $25,000 every year to send a child to a good private high school, it’s actually a good proposition.


“Having said that, my advice to anyone considering investing in school zones, is you need to be really wary of buying the right type of property for your intended rental market. It’s absolutely essential it’s family appropriate. A one-bedroom apartment would be a poor investment.”


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