Prices of car parking spaces likely to be more resilient in market downturn than residential property
The number of private cars per 1,000 population increased from 49.5 in 2003 to 71.2 in 2015
The prices of residential car parking spaces move in tandem with changing residential flat prices, but a shortage of car parking spaces provides a safety net against a price slump in the near future.
The average price of a car parking space rose 204 per cent from 2005 to 2015, while the overall residential price, according to the index produced by the Rating and Valuation Department, rose 223 per cent in the same period. The average price of a car parking space rose from about HK$397,000 in 2005 to HK$1,207,000 last year.
Residential prices are now in a declining trend, with the Centa-City Leading Index at an 18-month low, down 13 per cent from its peak in September. Following the historical trend, it seems logical to expect prices of car parking space prices will also decline. However, they are likely to fall more slowly than residential properties.
The upsurge in residential prices in recent years was fuelled by a shortage of housing supply and strong demand from buyers from Hong Kong, mainland China and overseas.
Car ownership has also grown as more people ... choose to own affordable valuables rather than following their parents who saved money to buy real estate
Similarly, the price of car parking spaces has also been supported by strong demand from investors – in particular those shifting from domestic properties to non-domestic properties after the introduction of special stamp duty and buyer stamp duty in 2011, as well as from end users.