The phenomenon of house prices chasing good schools cuts across boundaries as evidenced by news reports around the world.
You know you are on to something big when major publications such as The Independent, CNN, Washington Post, The Telegraph and the Vancouver Sun write about it. A university researcher in the UK has even done a thesis on it. What we are talking about is the phenomenon of good schools affecting the real estate prices in its surrounding.
Their headlines read: “Good school ratings can add premium to home prices”, “Want to beat the property market? Buy near a top school”, “The link between schools and house prices is now an established fact”, “School quality has a mighty influence on neighbourhood home values”, “England’s best schools are pushing up house prices” and “How schools can impact home prices.” Ring a bell?
In Asia, where education is very highly prized, a similar phenomenon prevails with sometimes extreme examples reported. In Beijing for instance, the ‘school district’ system in which children are enrolled in schools near their homes (quite a universal system), has sparked a rush for houses near schools with good reputation. The matter came to a head when it was reported that an 11-sq m house in a central Beijing hutong near a good school was sold for 460,000 yuan (USD70,610) per sq m. That’s more than 10 times the average price of a house in Beijing which is about 41,586 yuan per sq m.
In general, the price of houses in good school districts is about 20 to 30% higher than the average housing price in Beijing. Parents also see it as an investment as prices of these houses are less susceptible to the ups and downs in the real estate market.