Adelaide high school rezoning already hurting property values, real estate agent says

Controversial changes to the enrolment zone for two Adelaide CBD public high schools are already having a noticeable impact on house prices within the affected areas, according to a local real estate agent.

On Monday, the South Australian Government announced it had restricted next year’s enrolment at Adelaide High School and Adelaide Botanic High School, making students in several western suburbs ineligible.

The Government said the schools no longer had enough capacity. The decision triggered concern among parents and real estate agents about the long-term impact on house prices.

But one real estate agent said there was already evidence the catchment zone change was knocking value off local properties.

Kiet Duong was expecting to sell a Clarence Park home at auction this morning.

The property now finds itself outside the catchment zone, and Mr Duong said several keen prospective bidders pulled out at the last minute.

“It was in the school zone so it should have sold … but obviously the news that came through this [week] has obviously affected the campaign,” he said.

“This week we had six looking at pre-registering to come to the auction and I had the phone call on Wednesday saying ‘I’m so sorry, I can’t come anymore because it’s not in [the] school zone’.

“We only ended up with one.”

Mr Duong said the home was expected to fetch close to $1 million, which he said was in line with comparable properties in the area.

“We thought it would sort of reach that with the numbers coming through the doors,” he said.

“It’s a beautiful symmetrical cottage from the 1900s, it’s a nice area full of good neighbours.

“The intrinsic value of the property is based on the school zone as well, obviously people are a bit confused now. Should they spend $800,000 to $1 million to buy a property here?”

‘Hopefully it knocks a few tens of thousands off’

The Real Estate Institute of SA said considerations about which public schools were available was a major factor for prospective buyers.

The institute’s CEO Greg Troughton said the Government had shown an “underappreciation” of the value of school zoning.

“If a popular school is no longer in that catchment zone, we expect to see some issues when it comes to pricing,” he said.

“We’re finding a cohort of buyers that are focused on the catchment zone and generally when there’s a popular school in that catchment zone people don’t really care about whether there’s an ensuite or a third or fourth bathroom.

“What we have observed is a lot of concern [among] particularly those people who are on the market now.”

Mr Duong urged the Government to reverse its decision, but neighbour Andrew Brown said other factors could have influenced today’s auction outcome at Clarence Park.

“[Prices] do seem to have flattened off quite a bit and people with houses like this one, which are great and traditionally commanded a very high premium, don’t seem to be clearing as much as they used to,” he said.

“We’re not looking to move or sell any time soon so hopefully it will pick up again, but if I was looking to sell today I’d be a bit concerned.”

But Mr Brown added he thought the rezoning was “kind of rough”, and said it “makes no sense unless you look at it through a political lens”.

The Government rejected that kind of criticism, saying “decisions are based on the best interests of the South Australian education system”.

“Regarding the CBD high school zone, detailed work conducted by the Education Department showed that enrolment pressures were beyond the capacity of the city schools as soon as next year,” the Government said in a statement.

But the change is being welcomed by some buyers, who are less concerned about schools than they are about bargains.

“Hopefully it knocks a few tens of thousands off the price,” one said.

“It hasn’t changed my opinion.”

For more information refer:

https://www.abc.net.au/news/2019-02-23/school-catchment-zone-change-hits-property-prices-agent-says/10843488