Hong Kong’s favourite speculative bet is burning investors as protests puncture bubble in parking lot prices
- Transactions of parking spaces this year have dropped 39 per cent, on course for the lowest annual total since 2009
- Protests have burst the bubble as losses emerge in transactions this year, versus spectacular windfalls in 2018
Six months of anti-government protests in Hong Kong have burst the bubble in the market for car parking spaces in the city as windfalls from flipping the asset evaporated and speculators were stung by losses in several transactions this year.
The bet has lost its flavour with individual investors as demand crumbled along with a slump in prices for residential properties. Violent clashes and heightened trade war tensions have dogged the housing market through November, dragging the local economy into its worst slump in a decade.
Some 5,618 parking bays changed hands in the first 11 months this year, a 39 per cent slide from a year earlier, according to data published by the Land Registry and compiled by Hong Kong Property (Services). At this rate, the annual volume will reach the lowest point since 2009, according to Centaline Property Agency.
At the height of the speculative fervour, 8,968 slots worth HK$16.64 billion were recorded in 2018, the most since records began in 1996, according to Centaline. “The overall sentiment is not good as some [potential] buyers are worried about the falling home prices affecting the parking space [market],” said Richard Lee, chief executive at Hong Kong Property. “The situation in parking spaces may be even more serious than in the home market.”
There were 518,589 private parking bays and 238,320 public spaces at the end of 2018, compared with 744,191 licensed private cars, commercial vehicles and motorcycles in the city, according to government data.