$547,000 for a parking space in Hong Kong
Impatient buyers in this densely populated city have shoved prices to record highs in latest months, with prime spaces now selling for far more than the luxury cars that park in them.
In May, a single space in a residential neighborhood on Hong Kong Island went for Four.24 million Hong Kong dollars ($547,000), making it the most expensive parking space ever sold in the territory.
The quirky market is being driven by a combination of factors: Low supply, high request, and speculators who view parking spaces as a potentially lucrative investment chance.
"I am astonished how much interest there is on the market about buying and selling parking spaces," said KK Wong of Hong Kong City Parking. "Five years back, nobody would even be asking."
With land at a premium, most Hong Kong homes don’t come with a driveway or garage, and even luxury apartment buildings don’t always suggest car parking. The result is a total of 683,000 parking catches sight of for a population that exceeds seven million.
The parking spot craze embarked heating up a few years ago, when the city government introduced fresh taxes to help cool the residential property market and drive out speculators.
The strategy worked, but some investors shifted their money into parking spaces, which were exempt from the tax. Owners were able to resell the little properties, or rent them out for a profit.
Wong, who operates several parking lots and a listings website, said the flood of fresh investment dollars shoved prices higher, and further diminished the number of available parking catches sight of.
Near the market’s peak in 2012, buyers were suggesting as much as $640,000 for a single parking space.
The government eventually closed the loophole, levying a tax that also covered the purchase of parking spaces. "That put some cold water onto the market," Wong said, "But it’s heating up again."
The number of registered parking catches sight of sold in August climbed to 956, a 29% increase from July and the highest in twenty months, said Thomas Lam, a senior director at real estate stiff Knight Frank.
Because Hong Kong boasts one of the world’s lowest car ownership rates, with only about sixty two cars per 1,000 people, most city residents are able to avoid the agony of rising prices.
But having a car is still a must for some Hong Kongers. Possessing one car (or several) is a status symbol, and indicates the car proprietor also has the money to buy a pricey spot to park the vehicle.
"In America, a car is a necessity; in Hong Kong, it’s a luxury — [public] transportation is indeed efficient," said Buggle Lau of Midland Realty. "And if you buy a car, you also need to buy a car park."
