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Prices in Toronto’s real estate market have become famously high, breaking new records each month – but what kinds of homes are really whipping buyers into a frenzy? It turns out, a top feature driving bidding wars is a home’s proximity to a highly-regarded school.
In fact, according to recent data collected via Zoocasa’s school search function, the premium for living near one of Toronto’s top-rated learning institutions can top hundreds of thousands of dollars – as much as $800,000 in one case.
Budget Big for the Best Schools
It’s a price difference that can take prospective buyers by surprise, says Zoocasa CEO Lauren Haw, adding that the process of researching – and budgeting for – certain school-oriented neighbourhoods can add a layer of frustration to the buying process.
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“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.”
However, there’s a benefit to shelling out more to move closer to a desired school – homes in the area will always be in high demand, says Chantel Crisp, Zoocasa Realty’s broker of record.
“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,” she says. “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.”
To provide an idea of how much more expensive Toronto condos, townhouses or detached dwellings can be within coveted school boundaries, 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.
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You can continue reading after the infographic…
So… Who’s Buying?
With proximity to the best schools commanding such a high price premium, it’s not surprising that they’re most likely sought by the highest-income households. A recent home buying and sentiments survey of over 1,000 Canadians revealed those earning $100,000 and over are 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.
According to the study, the importance of buying a home near a good school or district varied based on income:
- $49,999 and under: 21%
- $50,000 – $99,999 – 40%
- $100,000+ – 46%
Buyers who were highly educated themselves were also more likely to cite schools as an important factor, with the survey finding the following:
- High school or lower – 24%
- College – 29%
- Bachelor’s Degree – 39%
- Master’s Degree – 47%
What does this mean for prospect buyers of Toronto real estate? It’s more important than ever to work closely with a reputable agent who has solid insights into your desired neighbourhood. Taking these price premiums into account is an important first step when creating your home buying budget to ensure your family’s housing and education needs are met during your search.