Concrete Analysis | Will record-setting prices of car parking spaces on The Peak drive other owners to mark up their assets?
- Prices have risen in recent years as car registrations in the city outpaced the supply of new parking spaces, higher affordability
- There is no evidence to suggest prices in luxury residential developments have risen sharply after the record deals at Mount Nicholson
According to more than 40 parking spaces sold by the same developer, the prices reflected some of the highest ever recorded to date. How could a mere 2.5 by 5 meters parking space command such lofty price levels? The answer may be found in the car park-to-flat ratio in the city.
In low-density residential areas such as this one on The Peak, an average of 1.5 parking spaces are stipulated to be provided for every unit. Considering the limited public transport options and the typical apartment size of more than 4,000 sq ft (371.6 square metres) there, high car ownership is a given. The registry shows just that, as some owners with two flats purchased three car parking spaces.
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Why car park ownership is big business in Hong Kong
In high-density residential areas, the parking space per flat ratio is normally lower. However, demand for cars is not always easy to predict.
Generally speaking, developers first licence parking spaces to owners and then sell to them when demand is evident. Developers can simply hold onto the spaces as a long-term investment as well. A case in point is a 40-year old estate in Quarry Bay, where the developer only recently offered them for sale to existing flat owners.
Though sales of the aforementioned The Peak development flats dated as far back as late-2016, car parking spaces were not part of the package. Five years on, the developer has only started releasing them via tender submission.
For new low-density developments, developers often sell the flats together with the parking spaces, since the availability of one or two bays is deemed essential to potential buyers. Most buyers do not want to miss out despite the seemingly exorbitant costs, or they would end up having to license or rent the spaces from others.
