Update on Hong Kong parking prices

In November, we reported that the cost of property prices for car parks in Hong Kong was going through the roof, following the introduction of measures from the government to cool the cost of property prices.

Car parking spaces are now selling for more than some homes, with AU$276,000 being paid for a space in November; another sold for US$385,000 in March. According to the Sydney Morning Herald, two spaces in the commercial district were recently offered $US640,000 per space.

Home prices have nearly doubled since early 2009, driven largely by wealthy buyers from mainland China. A typical 55-square-metre apartment now costs about $US577,000, with prices soaring into the millions in parts of Hong Kong Island, the city’s commercial and financial centre.

Last year the government introduced curbs aimed at property speculators. Starting in late October, a 15 per cent stamp duty was levied on sales to non-permanent Hong Kong residents. A tax of 20 per cent was imposed on properties resold within six months of purchase, according to the LA Times.

The result was that investors channelled their money into parking spaces, where the new rules did not apply. Parking space transactions in November rose more than five-fold compared with a year earlier, said Centaline, one of the largest real estate firms in Hong Kong. The average price of each space sold was $US92,307, up 20 per cent from a year earlier.

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