Revealed: The incredible rise of house prices in school zone

Property prices in top Auckland school zones have risen as much as 35 per cent and revelations some schools could stop out of zone applications will only keep driving up prices in already expensive, school zones, an industry body warns.

Bindi Norwell, chief executive at the Real Estate Institute of New Zealand, says the concern facing these areas is that the upwards pressure on prices in popular school zones will further lead to unaffordability issues.

"As Auckland continues to experience unprecedented population growth, we understand that ending out of zone applications may be a necessity given the growth schools are facing. However, given the upwards pressure on prices of buying in a popular school zone, our concern is that this will place even more pressure on some of those areas, further adding to unaffordability issues for people to send their children to some of these popular schools," Norwell said.

Norwell says there is usually a premium for schools in the "so called 'good' school zones", something that is evident when comparing sale comparisons in different areas.

In four school zone areas, the median property price increased at a faster rate than that of the Auckland region median (21.4 per cent) in the three months to March 2018 compared with the three months to March 2015 figures.

The Rangitoto College School Zone led the way with a 35.2 per cent increase in median property price, followed by Western Springs College School Zone (up 30.2 per cent), Glendowie College School Zone (up 28.3 per cent) and Mount Albert Grammar School Zone (up 23.7 per cent).

"These figures show just how popular some of these school zones are - especially those that have a good proximity to the Auckland CBD and are close to transport links/infrastructure. Considerations of Auckland's traffic has become of increasing importance and many buyers would rather pay a premium for location to save time on travel to the city. They're also prepared to sacrifice views for a quicker commute time," Norwell said.

School zoning already plays a huge part in property purchasing decisions of parents with school aged children.

Last year Auckland man Xuesen Liu had his complaint to the Real Estate Agents Disciplinary Tribunal upheld after claiming real estate agent Maxwell Parore had mislead him about a Grafton property which was marketed as being in the Epsom Girls Grammar school zone when it wasn't.

Liu filed the complaint to the tribunal after entering an agreement for the sale and purchase of the Grafton house on October 11, 2015, before paying a deposit of $300,000 just over a month later.

However, on settlement day, January 18, 2016, Liu's solicitor advised the vendor's solicitor that he wished to cancel the sale contract under s 7 of the Contractual Remedies Act 1979, on the grounds that contrary to representations made by Parore, the property was not in the Epsom Girls Grammar zone.

After some negotiation, the vendor accepted the cancellation and Liu's deposit was refunded.

Liu however was still charged $3400 by his solicitor for his attendances to secure cancellation of the sale contract.

In its decision, the committee made an order censuring Parore after finding that he had engaged in unsatisfactory conduct, though through a lapse of judgement and a human error rather than a lack of knowledge of real estate process and protocols of the Real Estate Agents Act.

"[Parore's] error was incorrectly advising the property was zoned for [Epsom Girls Grammar]. If the representation was material and had resulted in the purchase of the property the error could not have been rectified by [Parore]. As the purchase did not proceed rectification is not a relevant matter now," the committee said.

Parore was ordered to reimburse Liu the sum of $3,400 in respect of his legal fees incurred in obtaining cancellation of the sale contract.