Schools can provide a boost for neighbourhood property values

The fact that proximity to schools has an impact on residential property prices is well-known. In fact, better grades achieved by children irrespective of which school they go to is also known to increase these values.

According to a 2011 research by Tim Bartik, an American economist, there are possible property gains that emanate from higher quality early childhood programmes. Bartik made detailed computations to prove that the likely property value effect of the existence of a high‐quality pre-school in the vicinity could be as high as 13 times the annual programme costs.

He indicates that if parents fully understood the earnings effects of pre-school, they would pay even more to access such programmes, with property value increases of as much as 80 times the programme costs.

It is worthwhile to analyse whether this trend be seen in Dubai, especially post the economic crisis, since property prices and rents are now reportedly based on fundamentals. Also, a larger base of new mothers had to go back to work sooner than they would have otherwise. Has this had an impact on property prices, making neighbourhoods with pre-schools extremely popular and pricey?

We have looked at the greater Jumeirah area which encompasses Jumeirah 1, 2 and 3, Umm Suqeim 1, 2 and 3, Al Safa 1 and 2, Umm Al Shief, Al Manara and Al Wasl. This eight-kilometre stretch has over 40 nurseries. We physically went and visited 30 out of these and were amazed at the large number of under-fives that were actively being schooled.

Our research led us to some very interesting conclusions. Dubai is not extremely pedestrian-friendly with the weather worsening the situation, making walking or using public transportation with little children in tow quite difficult. Most nurseries reported that majority of their pupils were driven to school and do not live within the vicinity of the nursery.

Another aspect worth noting is what matters to most parents is that the nursery should be on their way to work. As such children living in JBR or Karama could be coming to the Jumeirah nurseries since their parents worked in DIFC or Dubai Media City respectively.

We created a heat map of the nurseries, in order to see whether more nurseries in a particular area made it more expensive than others. We saw that Jumeirah 1, 2 and 3 and Umm Al Shief had fewer nurseries compared to Al Manara, Al Safa and Umm Suqeim 3. However, we could not decipher a clear trend which showed that rents were lower in Jumeirah 1, 2 and 3, since factors such as proximity to the beach cancelled this negative aspect.

We then looked at another upcoming ‘nurseries hub’ — Jumeirah Lake Towers. Over the last six months we have heard of at least seven nurseries that have either opened or are planning to open soon in JLT. In this case we were able to see some correlation between property rates and availability of a pre-school within the building.

It is extremely difficult to pinpoint exactly why property prices differ from location to location and exactly how much impact a particular factor has, especially in Dubai which has such a varied property sector. However, we can surely conclude by saying that proximity to pre-schools has a positive impact.

— The writer is the head of valuations and research at Chesterton International.