Buyers paying up to €10,000 more for home near school

Buyers are paying a premium of as much as €10,000 to live close to a secondary school, new research reveals.

According to Daft.ie, home buyers across the country are paying, on average, a premium of 2.6 per cent of purchase price, or €5,600, to live 100 metres from a secondary school, based on an average home costing €215,000.

The premium is even higher in Leinster (outside of Dublin), where homeowners are paying a larger premium (4.7% or €10,105) than those in Connacht and Ulster (0.6% or €1,290).

The survey also shows that “good” secondary schools – ie those who send on a higher proportion of students to third level – also attract a higher premium. For schools where 80 per cent or more of final-year students progress to higher education, the price premium is 4.3 per cent, the survey reveals – almost 10 times as large as the premium where fewer than 50 per cent of students progress to higher education (0.5%).

Benefits

"In other countries, this link between house prices and schools is the reason that property tax is used to fund schools," says Ronan Lyons, assistant professor of economics at Trinity College, Dublin. "While that's not the case yet in Ireland, this shows a different aspect of the benefits that occur from public investment in education."

The premium has fallen since the boom, however, having stood at 3.8 per cent between 2006-2008, dropping to 2.1 per cent between 2009-2012 and 0.9 per cent between 2013-2016.

“This may be a legacy of negative equity, with a lack of mobility for those who bought 2003-2006 and whose children are close to secondary-school age,” the report notes.

Apartment-buyers are not paying the same premium, with owners of one- to two-bedroom properties paying a premium of 1.3 per cent compared with more than 2 per cent for purchasers of family properties with three to five bedrooms.

Beleaguered Irish parents may bemoan the premium they pay to avoid a long commute to schools, but their UK counterparts are paying significantly more.

Research from Lloyds Bank earlier this month found that parents trying to live near a top-performing state school – ie those with the strongest GCSE results – face paying a premium of up to 17 per cent of the purchase price (£53,426).