In Asia and specifically China a prestigious education, that is internationally recognised, drives the parent’s future income and their social mobility. Both are very powerful drivers within Asian culture.
The trends in international education are changing. The Economist has reported that “Tiger Mums” are now seeking to accompany younger children overseas for education. This term refers to the Year of the Tiger in Chinese astrology. In the past men did not want to marry these women as they were not subservient in Chinese culture. Now they are being touted as educational champions for their children’s future opportunities.
They are searching for suitable education for their children, and a suitable country for their potential emigration. Many of them give up lucrative employment to run a household for their studying children showing the power of these driver.
In the US housing prices in towns like Princeton have increased to a 20 to 30 percent premium, driven by the demand for access to education. The Huran Report 2015 Annual Chinese HNWI Asset Allocation White Paper, produced by a private market research group in China, quotes that 46% of overseas investment property purchases are driven by access to a school district, 21% by access to a Chinese population enclave and 26% by access to the city centre, which usually gives good access to universities.
The factors driving decisions on tertiary education are driven by six factors according to Juwai.com, the largest Chinese investment property platform. They list quality; heritage; accessibility; immersion; less pressure and broader curriculums; and, a stepping stone to emigration. This list seems equally pertinent for secondary or primary education.
International universities vie for ranking on top 100 lists as a measure of the quality of the education. Juwai.com’s list suggests that mainland China has only two universities in top 100, the USA has 39, the UK has 16, Germany has nine and Australia has six. They also resonate with the heritage through the past alumni of the institution. Harrow and Eton in the UK and Cambridge and Stanford in the USA are ranked highly. We might also assume Sydney and Melbourne are also well ranked.
Accessibility is key. In June over 9 million students took the Gaokao exam that is the sole decider of access to higher education. The University of Peking, the most highly ranked University in China, takes 84 of every 10,000 applicants in Beijing and only 3 in 10,000 in rural areas. Very internationally competent students are unable to gain access.
In addition, the Gaokao exam is notoriously limited in its curriculum. In comparison international schools recognise and reward talent across a broader curriculum. This can be beneficial for many students who do not excel in the Goakao subject matter.
Immersion in English language and western culture takes Chinese students into weekend schooling, or for the Tiger Mum we might assume International Schools, with their huge fees, for a year or two before immersion internationally.
The new Australian student visas are very timely to capitalise on the “Tiger Mum’ phenomenon. They support care giving parents moving to Australia with the students and offer migration opportunities for the talented. However, it is unclear who will drive their adoption overseas. The tertiary market is driven by the universities who have numbers whereas private schools in Australia may struggle to have the resources.
Student visas drive property purchasing in key school zones, or with access to good neighbourhoods near tertiary education. The American realtors, English and Australian real estate agents are all saying, “Buy where the Chinese buy as they support higher price growth.” School zones that appeal to Chinese students is a strong additional driver to underlying demand. This assists the achievement of above average property growth.