Ho Man Tin parking space sold for record-breaking $6m as garage values outstrip sky high home costs

The average parking space cost has ballooned more than six times since 2006.

Bloomberg reports that the recent surge in the prices of parking spaces are making Hong Kong’s sky high housing costs look tame by comparison after a single parking spot in a luxury development in Ho Man Tin, Kowloon changed hands for a record breaking $6m, which puts it at par with posh homes in Tokyo, London and New York. 

Also read: Home sales balloon 56% to 6,646 transactions in April

The average cost of a parking space in Hong Kong has ballooned more than six times since 2006 to an average of around $2.25m whilst home prices have only increased by a measly 3.4 times over the same period. In fact, an estimated $10.3b in parking space have already been sold in the first half of 2018, up from $6.58b in the same period a year earlier.

Reuters earlier reported that a parking space worth $720,000 could easily double in value in the past 18 months whilst it takes about seven years for flats, measuring only around 300 square feet (28 square metres), to record the same growth of 120%, according to data from Centaline Property Agency.

The primary reason for the fast pace of growth is that developers have been steadily building a greater number of apartments than garages, said Denis Ma, head of research at JLL, so the ratio of parking spots to housing units have steadily declined despite a 50% growth in private car population to 536,025 in the ten year period leading up to 2016.

“It provides an opportunity for short-term investment that residential cannot provide,” said Patrick Wong, a property analyst for Bloomberg Intelligence in Hong Kong.

An earlier report noted that a number of big banks like HSBC and Standard Chartered have even started offering mortgages tailored for parking spots as residents scramble to cash in on the profitable boom.

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Photo from Hong Kong Free Press