Parking spaces on rising tide

Technology | Kevin Xu 11 Jul 2019

Over the past six months, prices of car parking spaces in Hong Kong rose by 6 percent to 45 percent due to short supplies despite the Sino-US trade tension.

The car parking spaces at Kingswood Villas in Tin Shui Wai transacted at around HK$1.45 million as of early June, up by 45 percent after hitting a low point at HK$1 million at the end of November, according to Centaline Property Agency. The rental yield ranged from 2.5 percent to 3 percent with a prevailing market rent between HK$2,600 to HK$3,000 per month.

For instance, a parking bay at Kingswood Villas sold for HK$1.46 million in mid-May, 106 percent higher than it was sold four years ago at HK$710,000.

The car parking spaces at Hong Kong Garden in the New Territories were priced at around HK$1 million in early June, 42.8 percent higher than six months ago, with a rental yield between 3.4 percent and 3.6 percent, and rent ranging from HK$2,900 to HK$3,000 per month.

Car parking spaces at City One Shatin sold for around HK$1.4 million a month, 16 percent higher than in November, and many buyers made purchases for investment.

According to Ricacorp Properties, the prices of the parking bays at Whampoa Garden in Hung Hom increased by only 11 percent to about HK$2.5 million as of early June, as most purchasers bought it for personal use.

A parking space at Laguna City in Kwun Tong sold for HK$2.5 million early June, and is 7.2 percent higher than another parking space on the same floor that was sold in November.

The car parking bays at Caribbean Coast in Tung Chung transacted at around HK$1.6 million early June, 6 percent higher than at the end of last year, said Centaline Property Agency.

The ratio of parking spaces to private vehicles in Hong Kong was 1.1 last year, down by 27.2 percent from 1.51 in 2006, since the number of private cars rocketed by 53.4 percent to 616,220 during the same period, the Audit Commission said in a report in April.

Chief executive of Midland Realty's residential division Sammy Po Siu-ming estimated that the prices of car parking bays would grow at a slower pace or even fall a bit in the short term, as the buyers are taking a wait-and-see stance and assume speculation in the market would slow amid the trade war between China and the United States.

However, Po said he is still bullish about the investment value of parking spaces in the long run due to short supply.

He added that the prices of parking spaces will rise significantly if property prices are on an upward trend and the demand for car parking spaces increase.

The number of parking space registrations increased by 7.4 percent month-on-month to 725 in May - the highest level in the past nine months - but its value declined by 38.2 percent month-on-month to HK$1.4 billion because many large value transactions were recorded in April, said Hong Kong Property chief executive Richard Lee Chi-shing.

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