Home Buyers in Ireland Pay a Premium to Live by Secondary Schools
According to Daft.ie's latest property report, the Irish pay on average 2.6% more to live close to a secondary school. This translates into a national average of €5,600 (USD $6,273) more to live 100 metres from a post-primary school, compared a similar property 1km away from the same school.
The report also examines whether the premium varies around the country. It finds that the premium is largest in Leinster, outside of Dublin, where it stands at 4.7%, compared to 1.6% in Dublin. In Munster, the average premium is 2.5%, while in Connacht-Ulster, it is 0.6%. Reflecting the fact that families requiring larger properties also require access to schools, the premium is bigger for three-, four- and five-bedroom properties (2.2%-2.4%) than it is for 1-2 bedroom properties (1.3%).
The report also finds that schools that send a larger fraction of students on to higher education cause a bigger impact on house prices nearby than others. For schools where 80% or more of final-year students progress to higher education, the price premium is 4.3%. This is almost ten times as large as the premium where fewer than 50% of students progress to higher education.
Commenting on the report, Ronan Lyons, Assistant Professor of Economics at Trinity College, Dublin said, "This research uses a host of different datasets and leading methods to investigate how being close to a secondary school affects the price of housing in Ireland. It puts numbers on the common-sense intuition that it costs more to buy a house with good access to schools. It also finds evidence that supports the idea that houses close to better schools enjoy a bigger price premium than others."
"In other countries, this link between house prices and schools is the reason that property tax is used to fund schools. While that's not the case yet in Ireland, this shows a different aspect of the benefits that occur from public investment in education."Ireland Housing Report Highlights:
- On average, the premium for being close to a secondary school nationwide is 2.6% or €5,600.
- The premium is significantly smaller for 1-2 bedroom properties (1.3%) than for 3-5 bedroom properties (above 2%).
- The premium for being close to a secondary school has fallen since the boom.
- The premium is far greater for schools with the highest progression rates (4.3%) than for schools where less than half continue on to higher education (0.5%).