Car park prices soar on Chinese bundled home purchase deals
Property developers unleash secret weapon to beat home price caps by municipal authorities
The cost of car parking spaces in new apartment projects in some Chinese cities is soaring as developers roll out their latest secret weapon to counter home price caps imposed by municipal authorities.
As if contending with sky-high home prices wasn’t enough, some buyers are now forced to fork out as much as one million yuan ($151, 821) for car parking spaces in major second-tier cities, such as Tianjin, Xiamen, Hangzhou, nanjing and Suzhou. They are sold with an apartment worth as little as 2.4 million yuan, in bundled deals that make it compulsory for residents to purchase the parking space.
“There’s a price cap on apartments, but not on parking spaces, so we’re bundle-selling them with apartments to compensate,” said a Shanghaibased developer who declined to be identified due to the sensitivity of the issue.
“Recently we sold parking
spaces in Xiamen for over 1 million yuan each. Last year one only cost less than 200,000,” he said, referring to spaces in the port city in Fujian province in southeastern China.
To fend off speculators and defuse a housing bubble, major cities across China have slapped a series of restrictions on property markets, including imposing limits on developers’ selling prices.
That’s prompted property companies to find ways to ride out the tightening measures or skirt them, including delaying the launch of new home sales in the hope that when authorities relax some rules, buyers will jump back into the market and
they can release more supply at higher prices.
Top-tier cities such as Shanghai and Beijing have seen a surge in car park prices in the past three to five years, with some asking prices over one million yuan, mostly due to a massive shortage.
But second-tier cities are catching up in the past year, and this time driven by bundleselling, property agents said.
As China’s car park marketplace is not active and transparent, it is unclear exactly how much average prices have gained in different cities in the past few years.
“In almost every city with a price cap policy in place, if they allow developers to bundle-sell car park spaces, it is happening,” said Clement Luk, the CEO for eastern China at realtor Centaline.
“In the past, in cities like Nanjing and Suzhou, many car park spaces were below 100,000 yuan, but now many cost over 300,000. Is this a natural price appreciation? Definitely not.”
He said the bundling had been adopted to skirt price cap policies and manipulate selling prices. Authorities in Hangzhou, Nanjing and Tianjin did not reply to emails for comment. Officials in Xiamen and Suzhou could not be reached by email or phone.
Shimao Property, a higher-end developer based in Shanghai, said at an earnings conference on Tuesday that when it is seeking a pre-sales permit for a development it does ask the authorities concerned if it can raise some prices for renovation costs and car parking spaces, said vice-president Jason Hui.
Bundled deals that make it compulsory for residents to purchase the parking space
SECRET WEAPOR An eight-storey, three dimensional car park building that can hold up to 312 vehicles in Shenyang, in China’s Liaoning province. --AFP