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HK parking space investments fuel fears of bubble
Source: Agencies |
November 28, 2012, Wednesday
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INVESTORS looking for new places to park their cash in Hong Kong are driving up prices for parking spaces, sparking fears of a bubble in the Asian financial center.
Prices for parking spots in Hong Kong are nearing historic highs, the side effect of government curbs to cool the housing market amid worries of overheating following the latest round of monetary stimulus in the United States two months ago.
There are "a lot of speculators in the market, especially for car parks," said Buggle Lau, senior analyst with Midland Realty. A bubble is "definitely forming."
Over the weekend, a developer sold about 500 parking spots at a new suburban apartment complex at prices up to HK$1.3 million (US$167,000) per space.
In a commercial building near the city's financial district on Hong Kong Island, an investor has put 34 parking spaces on sale for HK$100 million, according to a report last week in the Ming Pao newspaper.
A parking spot in the exclusive Repulse Bay neighborhood sold for HK$3 million, the newspaper also said, citing Land Registry data.
Tomorrow, a single parking spot in a building in the popular Mid-Levels residential neighborhood will be auctioned off with the opening bid at HK$680,000.
Secondhand parking spaces changed hands for an average of HK$640,000 in the third quarter. That's up 16.4 percent over the year before, according to property company Centaline. It's also not far off the record HK$660,000 in the fourth quarter of 1997, just before the city's property market collapsed.
The rising prices are a side effect of recent measures to cool Hong Kong's housing prices, which have doubled since the end of 2009 and are among the highest in the world.
The latest curbs, however, don't cover nonresidential properties such as parking spots so investors have been piling in as they look for higher returns. Hong Kong had the world's third-highest monthly parking charges last year, according to real estate company Colliers International.
Nearly 8,400 parking spaces worth HK$5.6 billion changed hands in the first 10 months of this year, compared with 8,300 such transactions worth HK$5.4 billion for all of 2011, according to Land Registry data compiled by Midland.
"The latest overseas buyers' stamp duty will just put some fuel onto that fire, and is making the whole parking space investment market go out of control," said Josh Wong, whose Hong Kong City Parking owns about 200 parking spots at eight lots around Hong Kong.
Many investors who buy spots rent them out to car owners.
Prices for parking spots in Hong Kong are nearing historic highs, the side effect of government curbs to cool the housing market amid worries of overheating following the latest round of monetary stimulus in the United States two months ago.
There are "a lot of speculators in the market, especially for car parks," said Buggle Lau, senior analyst with Midland Realty. A bubble is "definitely forming."
Over the weekend, a developer sold about 500 parking spots at a new suburban apartment complex at prices up to HK$1.3 million (US$167,000) per space.
In a commercial building near the city's financial district on Hong Kong Island, an investor has put 34 parking spaces on sale for HK$100 million, according to a report last week in the Ming Pao newspaper.
A parking spot in the exclusive Repulse Bay neighborhood sold for HK$3 million, the newspaper also said, citing Land Registry data.
Tomorrow, a single parking spot in a building in the popular Mid-Levels residential neighborhood will be auctioned off with the opening bid at HK$680,000.
Secondhand parking spaces changed hands for an average of HK$640,000 in the third quarter. That's up 16.4 percent over the year before, according to property company Centaline. It's also not far off the record HK$660,000 in the fourth quarter of 1997, just before the city's property market collapsed.
The rising prices are a side effect of recent measures to cool Hong Kong's housing prices, which have doubled since the end of 2009 and are among the highest in the world.
The latest curbs, however, don't cover nonresidential properties such as parking spots so investors have been piling in as they look for higher returns. Hong Kong had the world's third-highest monthly parking charges last year, according to real estate company Colliers International.
Nearly 8,400 parking spaces worth HK$5.6 billion changed hands in the first 10 months of this year, compared with 8,300 such transactions worth HK$5.4 billion for all of 2011, according to Land Registry data compiled by Midland.
"The latest overseas buyers' stamp duty will just put some fuel onto that fire, and is making the whole parking space investment market go out of control," said Josh Wong, whose Hong Kong City Parking owns about 200 parking spots at eight lots around Hong Kong.
Many investors who buy spots rent them out to car owners.
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