Paying for private education may be cheaper than getting a home within an elite state school’s area, data shows.

Parents could save hundreds of thousands of dollars by forgoing properties in elite Auckland school zones then privately educating their children with the money saved by buying elsewhere, new data reveals.

As thousands of children head back to school today after the summer holiday, research carried out by Bayleys, based on data from the Real Estate Institute of New Zealand (Reinz), suggests parents could save up to $380,000 by buying a house just metres outside a top Auckland secondary school's enrolment zone then earning interest on the difference over five years.

Even once hefty fees were calculated for the most exclusive private schools, parents were still better off financially forgoing a "free" state school education at the likes of Auckland Grammar and opting instead for exclusive King's College or Diocesan School, says the research.

The revelations come as children head back to class this week and countless parents fret over whether their kids are receiving a decent education at their local school.

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Bayleys Auckland residential manager Rachel Dovey said most parents wanted the best education for their children's future, "even if they don't have lots of money".

"They may consider, 'Well I couldn't afford my child to go to Dio or St Kent's because of the cost'. But I don't think people stop to look at their options."

Bayleys analysed property values over two years across multiple Auckland suburbs - all within catchment zones of prominent state-run secondary schools considered among the country's top performers both academically and for sporting achievements. They included Auckland Grammar, Westlake Boys High School, Mt Albert Grammar School and Macleans College.

The research found that rather than buying homes 'in-zone' at a premium, parents were markedly better off financially buying out-of-zone in the same neighbourhood then sending their children to elite private schools such as St Kentigern, Kristin or St Cuthbert's College.

Ms Dovey said that even taking into account the cost of private education - which easily totalled more than $100,000 per student over five years at some of the city's elite institutions - home buyers were still better off buying out-of-zone.

"For decades, many Aucklanders lived under the misapprehension that they had to live in a particular suburb if they wanted to register their children into selected, high decile, high-performing state schools," she said.

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24 Jan, 2015 9:00am
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"Our data shows that to access quality education, that simply isn't the case."

Where a school zone boundary sliced through the middle of a suburban street, in-zone houses were up to $272,000 more expensive than comparable properties on the other side of the road.

"Over the life of a 20-year mortgage, at a fixed mortgage rate of 6.5 per cent, the extra $272,000 it costs to buy a home 'in-zone', with interest, equates to an outlay of $486,710. That's almost half a million dollars."

Loan Market mortgage broker Bruce Patten said the research provided a startling insight for parents into the financial premium of buying in-zone.

House hunters purchasing property in the exclusive Auckland Grammar zone could expect to pay around $500,000 extra for the privilege, he said.

But people were often prepared to pay more for their children to attend the right school for social reasons or lifestyle choices.

He added that in-zone properties were likely to appreciate faster and return a greater long-term capital gain.

Reinz chief executive Helen O'Sullivan warned home buyers that school zoneswere not immutable and could be redrawn "at the stroke of a pen".

"It's not the Ministry of Education's concern that you've invested in property on the basis of it being in Grammar zone. It is not a guaranteed thing.

"It's often occurred to me when I've observed prices being paid for properties in Grammar zone that you might be better off saving the dough and sending your kids to expensive private schools like King's. And interestingly, the maths does appear to bear that out."

In-zone vs out-of-zone

Median house sales values 2012-2014

Auckland Grammar School:

Parnell, Remuera, Mt Eden, Epsom, Newmarket, $1,115,500 vs Greenlane, $858,500. Difference $257,000

Westlake Boys High School: Forrest Hill, Sunnynook, Milford, Castor Bay, Campbells Bay, $736,500 vs Glenfield, $580,000. Difference $156,500

Macleans College: Mellons Bay, Bucklands Beach, Eastern Beach, and parts of Howick, Half Moon Bay, $910,000 vs Howick, $637,500. Difference $272,500

Mt Albert Grammar: Morningside, Kingsland, Balmoral, Sandringham, and parts of Mt Eden, Western Springs, Waterview, Mt Roskill, $752,900 vs Mt Roskill, $625,500. Difference $127,40
Source: Bayleys/Reinz.