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Hong Kong stamp duty

Investors find ideal spot to park their money

PUBLISHED : Friday, 09 November, 2012, 12:00am
UPDATED : Friday, 09 November, 2012, 3:59am

If you have been wondering where to park your money, well, try parking spaces.

Since the government imposed the additional stamp duties to dampen property prices, parking spaces have become the most popular property investment in town as they are not covered by the new duties.

Smart investors have thus shifted the focus to car parks which offer a high rental yield of 3 to 5 per cent, plus there is no stamp duty when it's time to sell. Chinachem Group has released an unspecified number of parking spaces in Hong Kong Garden, Bella Vista, Golden Lion Garden, Belair Gardens and Shatin 33 since Monday.

It sold 600 spaces on Monday and Tuesday and property agents estimate the company sold at least 120 more yesterday.

"People queued up at the sales office in Tsuen Wan's Nina Tower when sales began at 9am," said Andy Leung, senior sales manager at Midland Realty.

Agents said Chinachem, seeing the level of interest, raised the prices of the lots at Golden Lion Garden by HK$30,000 yesterday.

The average price of a parking space at Hong Kong Garden is about HK$320,000 and they can be rented for HK$1,500 a month, providing a net rental yield of more than 5 per cent, Leung said.

"If you spend HK$2.5 million to buy a flat at a housing estate and rent it out for HK$9,000 a month, your net rental yield is just about 4 per cent," he added.

Several agents said the yield on apartments at other estates range between 2 and 3 per cent.

"Most people buying parking spaces are investors. They are seeking a new avenue of investment to hedge against inflation," said Tony Lai, a manager at Centaline Property Agency.

"With a raft of new restrictions on residential property, parking spaces have suddenly become a popular investment," he said.

Other major developers such as New World Development and Sino Land have also started selling parking lots since the new stamp duties came into being.

Cheung Kong (Holdings) plans to sell parking spots at Tai Wai's Festival City later this month while Wheelock Properties is gearing to sell the lots at its estates such as Tai Wai's Parc Royale, Bellagio in Sham Tseng and Palm Cove in Tuen Mun.

Wong Leung-sing, an associate director of research at Centaline, however, warned the investment risk is also higher.

"If the economy tanks, the first thing people will do is sell their cars," he said.

There may be demand for parking today but the supply of lots could increase to 50 per cent if the economy sinks, he added.