[HONG KONG] Investors reacting to the Hong Kong government's
campaign to curb home buying in the world's most expensive market are
shifting money into parking spaces, pushing up prices that in high-end
neighbourhoods can match the cost of two US homes.
The average price of a previously owned parking spot in residential
complexes rose 6.7 per cent to HK$640,000 (S$100,938) in the third
quarter, the second highest on record, from the prior three months,
according to Centaline Property Agency Ltd.
A space in the exclusive Repulse Bay area sold in May for HK$3
million, the most for a single transaction and more than double the
median US home price, according to CarparkHK.com, a website that tallies
Hong Kong chief executive Leung Chun-ying has unveiled three major
sets of curbs on home buying since taking over in July, amid concerns
that continued US stimulus would attract more funds into the city and
fuel an asset bubble. Apartment prices in the city doubled in almost
four years, driven by near record-low interest rates and an influx of
money from China.
"There's just too much liquidity in the market," said Simon Lo, Hong
Kong-based executive director of research and advisory at property
broker Colliers International. "The government has set up a firewall for
residential properties, but all this money still needs to find a
Home prices gained 4.4 per cent in the third quarter, according to
Centaline, the city's biggest closely held realtor by market share. Hong
Kong is the priciest place to buy a home, according to broker Savills
plc, which compared prices in 10 cities, including New York and London.
Most parking spaces in Hong Kong, including those inside residential
complexes, are freely transferable with separate ownership titles from
the apartments, according to Hong Kong City Parking, which operates 10
parking garages in the city.
Even so, some garages have rules prohibiting nonresidents from
entering and parking on the premises, which lowers the leasing options
available to the owners, said City Parking chief executive officer Josh
Hong Kong banks normally lend a maximum 50 per cent of a parking
space's value, compared with 70 per cent for residential properties,
according to Kenneth Tsin, head of property loans at Bank of East Asia
Ltd. Parking-space mortgages are riskier for banks compared with
residential- and commercial-property mortgages, Mr Tsin said.
"They are relatively less marketable than flats and shops, while
their values are also less resilient than those of housing prices," he
Developers often sell the spaces independently from the residential
units. Cheung Kong (Holdings) Ltd sold 514 parking spaces at its
Festival City project in the city's north on Nov 24 for HK$980,000 to
HK$1.3 million, said Roy Choi, a regional sales director at Centaline.
While realtors post listings of parking spaces for sale and charge
fees on deals, few brokers specialise in them because the margin is too
small, said City Parking's Mr Wong.
Most buyers go to websites such as CarparkHK.com or ParkingHK.com, which partners with Hong Kong City Parking, for information.
The record for average parking-spot prices is HK$660,000, set in the
fourth quarter of 1997, just before the city's last major real estate
HK investors snap up pricey car parks
Published November 22, 2012， BT
The average price for each parking space in a commercial building near
Western is about HK$3 million, higher than the cost of a small apartment
in some areas of Hong Kong. - PHOTO: BLOOMBERG
KONG] Hong Kong investors are snapping up car parking spaces, raising
fears of a bubble after government moves to cool soaring property prices
last month drove speculators to seek new options.
investor had put a total price tag of HK$100 million (S$15.8 million)
on 34 parking spaces in a commercial building near Western, said Sean
Tsoi, a dealer at property development and investment agency AGW
Holdings Ltd, referring to an area just five minutes by car from the
heart of Hong Kong's financial district.
average price for each space in the building was about HK$3 million,
higher than the cost of a small apartment in some areas of Hong Kong,
which is home to the world's most expensive residential and retail
"Car parks have become a new hot
item," said Hanson Lam, senior property consultant at Midland Realty.
"They're overpriced and I worry that there might be a bubble."
Mr Lam said prices of parking spaces had jumped 20 to 30 per cent since the government's latest property curbs in October.
such as Sun Hung Kai Properties Ltd, Hong Kong's largest property
developer, and Cheung Kong (Holdings) Ltd, controlled by the city's
richest man Li Ka-shing, had sold more than 2,000 new parking spaces
over the past two weeks, said Wong Leung Sing, research associate
director at Centaline Property Agency.
Mr Wong said sales of new parking spaces had surged about 50 per cent so far this month although he was not alarmed.
a simple logic for investors: if you don't allow me to buy residential
properties, then I will turn to parking spaces, and it's still more
profitable than putting money in the bank," he said.
Kong leader Leung Chun-ying, who took over on July 1, earlier this
month expressed concern over the impact of hot money flows into the city
after the US launched a third round of quantitative easing in
"Capital is flowing into Hong
Kong, into its property market. Some people buy luxury properties, we've
seen soaring prices there ... money is also flowing into shops,
commercial premises and car parks," Mr Leung said.
inflow of hot money forced the city's central bank to intervene last
month to protect its currency band for the first time since the global
The government imposed
property cooling measures on Oct 26 to rein in residential prices, which
jumped 20 per cent in the first nine months of this year. - Reuters