A single residential car park space costing US$665,000? Surely that’s madness, you might think? Well, welcome to Hong Kong.

Investors in the city have shown strange tendencies in owning a piece of property. With property prices touching record levels in recent months, investors have been turning their attention to car parks.

A record price of US$665,000 was paid for a single parking space in Upton residential complex car park, in Connaught Road West, Sai Ying Pun, close to the central business district (CBD), on Hong Kong Island in April.

For the same crazy amount, you can buy two decent sized homes in the United States or Britain, and still have some money left over.

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This car-parking madness could intensify, as the city’s smart investors will continue to pay silly prices for spaces, property analysts say.

“They are a necessity for the apartment owners because they need car parks, and they can afford to pay high prices,” says David Ji, head of research and consultancy, Greater China, at international property consultancy Knight Frank.

However, not all Hongkongers are going car-parking mad just yet. The steep rise in property prices is also leading investors to put their money into another assets, according to a JLL analyst, who warns that the spaces’ value will not appreciate the same way as property prices.

Ji is in agreement, noting that rich investors would prefer to buy flats instead of parking spaces.

Even so, adventurous investors feel the sector’s frenzy. Research shows that there have been some spectacular increases in car park space values – notably in 2013, when the year-on-year value of 6,288 car park spaces sold in Hong Kong increased by 45 per cent, and 2011, when the year-on-year value of 7,738 car parks sold across the city increased by 42.3 per cent.

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However, so far this year, the price of car park spaces has been volatile. Data shows that in February their year-on-year value rose by 10.1 per cent, but in April the year-on-year value of car park spaces fell by 2.7 per cent.

With a limited local supply of car parks in Hong Kong investors are also looking overseas to invest, and in bulk buying rather than individual spaces, Ji says. According to CBRE in May, Australian property tycoon and horse-racing enthusiast Lloyd Williams sold a 16-storey car park in Melbourne’s CBD to a Hong Kong private company for about A$120 million (HK$737 million).

The vendor had reportedly doubled his investment on the Flinders Street car park he had owned for 10 years, with a yield of around 5 per cent expected for its 1,200 spaces, plus associated retail and office areas. The sale was brokered by agents from CBRE and Knight Frank.