The rising cost of buying homes near Schools

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

Buying real estate is a stressful enough endeavour,  but throwing kids into the mix adds a whole new layer of complexity to the house hunt.

While most buyers have a lengthy wish list of must-haves, usually centred around size, access to amenities and location, living close to a highly-rated school is a top consideration for 39 per cent of Canadians contemplating their next real estate purchase.

And you can certainly expect to pay more to live within a coveted catchment area, even in regions with softer conditions than the red-hot Vancouver and Toronto real estate markets.

“School districts have become a large factor that buyers consider when searching for a home. As a result, homes in better school districts tend to have greater demand and a larger buying pool,” says Chantel Crisp, broker of record at Zoocasa Realty. “Parents are motivated to get their children into great school districts even during economic downturns, so neighbourhoods with better school ratings are sought after in both times of economic growth and decline.”

Higher prices for higher learning

Just how much more do homes fetch in top school neighbourhoods? Buyers can expect to pay a whopping premium of over $800,000 in some cases, according to data collected via Zoocasa’s school search function. The fact that it’s not always clear whether a home lies within a school’s boundary can be a point of frustration for buyers trying to harmonize their home buying ambitions with their academic needs says Zoocasa CEO Lauren Haw.

“Homes across the street from one another may be in different catchment areas. Understanding where your home is within a certain boundary can help with long-term transition planning and reduce unnecessary moves,” she says. “Not to mention wealthy accumulation – school rankings are highly correlated to real estate prices.”

To get a better idea of how much living near a top-rated school will impact buyer budgets, check out the infographic below, based on the sale prices of homes with more than three bedrooms, and top EQAO-rated elementary schools in each of Toronto’s six boroughs.

Who Is buying in Toronto’s best School Neighbourhoods?

With such a hefty price premium to live in near popular schools, it should come as no surprise that high-income households are most likely to base their home search around them.

According to a survey of over 1,000 Canadians on home buying sentiments, those earning $100,000 and up are more than twice as likely to cite schools or school districts as an important factor when buying a home, compared to those with a household income of $49,999 and under.

The study found home seekers of varying income levels placed schools at the following levels of importance:

  • $49,999 and under: 21%
  • $50,000 – $99,999 – 40%
  • $100,000+ – 46%

Respondents also revealed that the more educated a buyer, the more consideration they placed on schools when shopping for a home:

  • High school or lower – 24%
  • College – 29%
  • Bachelor’s Degree – 39%
  • Master’s Degree – 47%

It’s important for buyers – and especially those looking to purchase real estate in extremely competitive markets – to understand the additional cost living near a top school can present. Communicating your child’s school needs and desired school boundaries clearly with your real estate agent, and what a realistic budget is for living within that catchment is the first step to finding an ideal home to suit your family’s needs.

Penelope Graham is the Managing Editor of Zoocasa.com, a leading real estate resource that uses full brokerage service and online tools to empower Canadians to buy or sell their home faster, easier, and more successfully.

 

 

 

 

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