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Summary
- REINZ has warned that alteration to school enrolment zones in Auckland could drive house prices further in the region.
- Property experts anticipate demand to rise in suburbs having top schools.
- Families that are eager to get a house in good school zones would be willing to pay more for their properties, putting extra pressure on prices.
As house prices in NZ continue to surge to record levels, REINZ has cautioned that the industry must take a note of the impact of new enrolment schemes on Auckland’s housing prices.
When a school is at or close to a capacity, the potential for overcrowding needs to be addressed. Enrolment schemes help manage overcrowding and ensure local students attend schools in their area.
The Ministry believes that Auckland will have about 60,000 more school-aged children by 2030. Subsequently, new schools and classrooms are being built to meet that demand.
Source: © Borzaya | Megapixl.com
In order to help Auckland deal with the student numbers, the Ministry of Education has been working on a three-year proposal to add or reform 135 school enrolment zones in the region. The Ministry had partnered with the first 60 schools on enrolment zones last year, and a majority of those schools are launching their zones on May 3 at the start of the Term Two.
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Housing developments in Auckland not enough to meet the demand
REINZ acting chief executive Wendy Alexander has advised that the reforms to school zones could place further strain on Auckland’s house prices.
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She stated that while households would consider a variety of factors when buying a home, such as the number of bedrooms and bathrooms, the size of the backyard, and access to public transportation, the school zone in which the property was located would also be a major consideration.
Alexander noted that previous understanding showed that homes within particular school zones sold for more money than homes outside of common school zones. A differential of one street would mean the difference between hundreds of thousands of dollars in some areas of Auckland.
Families that are eager to get a house in good school zones would be willing to pay more for their properties, which could put extra pressure on prices.
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REINZ reported that median house prices in the Auckland area rose by 18.5% since last year, hitting a new high of $1,120,000 in March 2021. House prices in Manurewa rose by 20.6% to $820,000 and showed indications that they will begin to rise in the months ahead. Manurewa is home to 6 of the schools where zonal changes will occur on May 3.
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Despite a rise in the number of housing projects across the country, Alexander clarified that Auckland's housing supply still couldn’t keep up with the demand.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)
