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Education’s influence on housing


The future: In London, property prices rise for homes that are located around good schools.

The future: In London, property prices rise for homes that are located around good schools.

IN LONDON, one consideration for choosing where to buy property is usually a location within the catchment area of a good school. State schools in this mega-city vary greatly and it can make the difference between your precious child having a charmed upbringing, with access to exclusive rowing clubs in Putney, or dodging weapons and spouting colourful words by the age of seven.

Even if you don’t have a child, properties near desirable schools are often considered to be within “good areas” with solid market values. One area I once rented in, called Wandsworth Common, was known as Nappy Valley. It had a few good schools clustered around a gorgeous green park, with properties within catchment areas commanding a 15% to 20% premium.

These neighbourhoods usually also have good amenities — a street with artisanal bakeries, gastropubs, a Waitrose supermarket and probably a Carluccio’s or Jamie Oliver restaurant, as opposed to betting shops and takeaways!

Competition for these properties is tough. Anecdotes abound about families renting second properties close to prestigious schools, while some parents find themselves rekindling their faith in Catholicism since many good non-fee-paying schools in London are Catholic. A schooling website, in fact, suggests you start going to church as soon as you are pregnant, as a priest’s signature proving a five-year history of attendance is sometimes required!

SRJK (C) Puay Chai students Jonathan Khoo (left), standard three and his friend Brian Ho, standard five, pulling their roller bags behind them as they walk out from the school compound
Attraction: People have been known to buy houses in SS2 so their children can go to school in SRJK (C) Puay Chai.

In Singapore, local parents complain of Chinese mainlanders buying up properties within 1km of the best schools just to get in. Parents also sometimes have to ballot to get places, lining up or getting their maids to line up from the night before, or volunteering to coach weaker students in maths and languages.

 

Private education increasingly the option

In the Klang Valley, getting into catchments areas seems less of an issue. In the old days, parents often aspired for ex-missionary schools, the likes of Assunta, La Salle and Catholic High School off Jalan Gasing, Bukit Bintang Boys School and Sri Aman girls’ school in Section 14, Petaling Jaya, as well as Victoria Institution, St. John’s Institution and Convent Bukit Nanas in Kuala Lumpur.

Over the last few years, however, I noticed more and more of my friends shunning government schools and sending their children to Chinese and even Tamil schools. Names which often crop up include SJK(C) Puay Chai in SS2 and Bandar Utama, SJK(C) Yuk Chai in Taman Megah and SMP (C) Kuen Cheng off the Federal Highway.

My friend, S.S. Teoh, for example, paid for a house in SS2, Petaling Jaya that was nearly twice the price of her house in Kota Kemuning, so she could send her daughter to Puay Chai.

A developer from UOA Bhd, which launched its Le Yuan condominium in Taman Gembira last year, meanwhile, shared that several buyers professed interest in the property especially after knowing that SJK (C) La Salle had just built its premises nearby.

Several developers, including MCT and Setia Haruman, have even brought together RM10mil to build a spanking new facility for SRJK (C) Union from Taiping in Cyberjaya. It is set to open by end 2014.

Meanwhile, international schools such as International School Kuala Lumpur, Sayfol and Fairview in Ampang’s embassy row, used to “follow” expatriate enclaves. From the mid-1990s, several moved to Mont’Kiara.

The Alice Smith International School annual summer fair - with rafael and team giving viewers a demonstration of capoera.
Attraction: The Alice Smith International School in Seri Kembangan, has seen luxury developments
spring up around it.

“Our goal for Mont’Kiara in the early days was to create a world-class community with lifestyle facilities and amenities benchmarked against the best in the world,” recalled Datuk N. K. Tong, group managing director of Bukit Kiara Properties Sdn. Bhd.

Tong worked with his father, Datuk Alan Tong, to establish Mont’Kiara in the early 1990s when Tong senior was helming Sunrise Bhd.

“As we developed our first phases, it became obvious that such a community would attract its fair share of expats, and we started looking at providing for their needs. The first international school, Mont’Kiara International School (MKIS), was thus developed by Sunrise.

“This was followed closely by Garden International School, and it was a few years later that a friend of mine from the French community approached me about finding land in the vicinity for the French international school. Once the first international school was introduced, it became a catalyst for the others, as more expats were attracted to the community,” he said.

The result has been a gold mine for Mont’Kiara. For property investors, it means expats paying rent of between RM6,000 to RM15,000 for a condo, rather than the RM1,000 to RM3,500 a local would normally pay. This, of course, means higher property values.

A quality school attracts a more affluent segment of the market and creates demand for high-end properties and investment-grade units, agreed IOI Properties’ senior general manager for marketing and business development Lee Yoke Har. The developer was approached by Rafflesia Education Group to start an international school, which has just opened in 16 Sierra, Puchong.

“When the school is well established, parents may uproot themselves from existing locations to make it convenient for their children to receive a good education,” she said.

The private school caters to a 100% local population, while 80% of the international school’s student population is targeted at locals and 20% at expatriates.

Schools as catalysts

Hungry for space, and confident of their pulling ability, more schools have even shifted out of the city. In 1997, for example, Alice Smith School opened a secondary school in Equine Park, near Seri Kembangan, then a barely developed area. Several property developers have cashed in with premium developments nearby, including Sunway Eastwood’s semi-Ds priced from RM1.7mil to RM2.3mil.

Also opening in the south have been the Australian International School in Mines Resort City, and Tanarata International School, near Country Heights, Kajang. Taylor’s International School, meanwhile, will open a purpose-built campus on 7.9 acres in Bukit Puchong in 2015. Pushing north is Help International School, which will open its purpose-built campus in Subang Bestari next January.

“Much like other facilities and amenities, schools have a pull factor, but more so for schools, because the children have to go there every day and parents gladly travel further to work if their children have a shorter commute,” added Tong.


Two tiers of international schools

Private and international schools have traditionally been the reserve of expatriates with fat pay packages and seriously well-to-do locals. Fees usually cost a king’s ransom of up to RM80,000 a year, not including initial registration fees and deposits. If you have two or three children, this would be like buying a luxury car every year!

With the reversion of national schools to teaching science and maths in Bahasa Malaysia, more parents are seeking English-medium schools, be it teaching a Malaysian or international curriculum. The government last year also lifted the 40% quota for Malaysians attending international schools.

What this means is that private and international schools are becoming less of a rarefied zone for the few expatriates, and more a common demand for middle-class family-friendly neighbourhoods.

Parents, in fact, now talk about two tiers of private and international schools — the likes of Mont’Kiara International School, the British School and Garden International School, which cater to expatriate parents whose packages cover school fees, and a second tier which caters to local and expatriate parents with less salubrious packages.

These include Tenby International School in Setia Alam, ELC International School in Sierramas, Sri KDU in Kota Damansara, Maz International School in Paramount, and Nobel International School in Kelana Jaya, for which annual primary school fees range between RM13,000 and RM20,000 per year.

Even though it was only established in 2009, Tenby international school in Setia Eco Park already has its 1,400 places filled, with a waiting list too. It is now building an extension to cater to the demand. Setia Alam, next door, meanwhile, will see SEGi Group’s international school open its doors in 2015.

The government is all behind this trend. It is one of the Government’s entry point projects to “ramp up” international schools to make Malaysia a regional education hub. Incentives include 100% tax allowances on capital expenditure within five years, liberalisation in foreign ownership, as well as facilitation of licenses and expatriate teachers’ visas.

Over the past five years, international schools have grown from about 57 schools with 20,000 students in 2010, to about 80 schools with 32,000 students today. By 2020, the agency targets 87 schools with 75,000 students!

Developers building schools themselves

Not only are developers making sure international schools are set up, they are increasingly building and operating them themselves. Education is big business after all.

Desa ParkCity’s International School Park City, for example, is a joint venture between the township’s developers, Perdana ParkCity Sdn Bhd, and education provider Brighton Education Group Sdn Bhd. IGB Corp Bhd, of MidValley and Gardens fame, will also enter education with IGB International School to open in Sierramas next August.

“Education has always been a spin-off from property,” said Paramount Property Development Sdn Bhd managing director Datuk Ricque Liew. Paramount Corporation Bhd was one of the early property developers also doing education, having established KDU University College and Sekolah Sri KDU.

“When a developer develops a township, he’s got the land anyway, and it makes sense to build schools on some of the land,” he added.

Paramount’s current Utropolis project in Glenmarie, Shah Alam, is in fact anchored around KDU University College’s new campus, once it moves from its existing campus in Section 13 PJ. Due to be completed by early 2015, the campus is envisioned to hold 7,000 students.

Besides a 500-bed student village, the “integrated project” will include over 1,000 units of serviced apartments in six blocks (690, 900 and 1,100 sq ft units sold from RM550 to RM660 per sq ft, reportedly), about 420 SoHo units, as well as 50 shops in a retail centre.

While the education business takes longer to pay back, unlike property which is mostly sold during construction, it is a source of recurring income and lends value to the properties’ sales.

“Our executive deputy chairman Datuk Teo Chiang Quan is also passionate about education because as businessmen, he wants to give back to the community.”

Ultimately, be it established by developers or not, what we are seeing is a mushrooming of privately-driven schools. Hopefully, this means competition will increase, parents have more choices and prices will drop.

One can’t help thinking, though, that this would be at the expense of government schools that education is increasingly privatised, just as security and maintenance of our streets have been in gated and guarded developments.

Speaking of security, fancy curricula and facilities don’t count a jot if residents don’t feel safe nearby. Taman Megah in Petaling Jaya has one of the Klang Valley’s most prestigious Chinese schools but you can’t eat in its restaurants without fearing someone would grab your handbag, or the restaurant robbed. And if your child can’t walk home on a busy street without being nabbed, what’s the use of paying more than RM50,000 per year?

At some point, all this privatisation and ghetto-isation stops working, doesn’t it? And I hope someday, we get some choice in that too.

For more real estate news and articles and a comprehensive listing of various properties, go to www.StarProperty.my. Contact the writer at sulin.chee@thestar.com.my.

   

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