HK parking costs $387,000 as cash moves from homes
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 neighborhoods can match the cost of two U.S. homes.
The average price of a previously owned parking spot in residential complexes rose 6.7 percent to HK$640,000 ($82,600) 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 ($387,000), the most for a single transaction and more than double the median U.S. home price, according to CarparkHK.com, a website that tallies parking-spot information.
Homes in Hong Kong are tough to buy with curbs on the real-estate market, so investors are moving into parking spots. One recently went for $400,000.
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 U.S. 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 recordlow 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 place."
Home prices gained 4.4 percent 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 (SVS), 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 Wong.