Why does a car parking bay in Hong Kong cost more than a flat in London’s upscale Knightsbridge area?

world record HK$11.9 million (US$1.53 million), Hong Kong’s sky-high home prices, Murray Road, determined by three factors, Parc City, Wharf (Holdings)

Hong Kong has long maintained its reputation as one of the world’s most expensive cities to own a home. Now, add car parking bays to the list.

Car parking bays in Hong Kong have been smashing records over the past few years. Last month a spot sold for a world record HK$11.9 million (US$1.53 million) at the exclusive Mount Nicholson development on The Peak. A 735 sq ft flat in Sloane Court East, in London’s upscale area of Knightsbridge, costs slightly less.

Hong Kong’s sky-high home prices, which are approaching a historic high, are pushing investors to look for other real estate investment alternatives, especially after the government removed the double stamp duty on non-residential property last November.

The low entry prices coupled with limited supply have made parking spaces a target for investors. Transactions for parking spaces in May rose 18 per cent month on month to 1,039, the highest since July 2018, according to Midland Realty.

What are the reasons contributing to the rise in prices of parking bays?

Several temporary car parks that had come up on many sites have been vacated in recent times, as the government speeds up redevelopment projects to increase housing supply, said Alkan Au, senior director of valuation advisory services at JLL in Hong Kong.

Since 2013, the city has lost more than 2,000 car parking spaces owing to changing land use. Three public car parks in Tsuen Wan, Tsim Sha Tsui and Murray Road, in Central, have closed and are being redeveloped into commercial and residential projects.

At the same time, developers prefer maximising the gross floor area for building homes which could generate higher selling prices, Alkan said, adding that most builders just provide the minimum provision for parking spaces to residents. 

How does the availability of parking spaces to private vehicles stack up in Hong Kong?

Between 2011 and 2020, the number of private vehicles increased by 36 per cent, from 478,364 to 651,358. But the ratio of parking spaces to vehicles fell from 1.32 to 1.05 over the same period, Knight Frank said, citing data from a Legislative Council document.

What is the price growth of parking bays versus homes?

Parking spaces have outperformed the residential market between 2012 and 2020. The average price of a parking spot surged 215 per cent from HK$680,000 in 2012 to HK$2.14 million last year, according to data from Midland Realty. In fact, prices fell last year after peaking at HK$2.33 million in 2019.

Prices of lived-in homes, on the other hand, jumped 200 per cent from January 2012 to April 2021, according to figures from the Rating and Valuation Department.

With the removal of double stamp duty, Martin Wong, director and head of research and consultancy for Greater China at Knight Frank, expects parking bay prices to appreciate by 5 per cent to 10 per cent this year, depending on the location.

How do the prices of parking bays compare with the residential market?

There is a huge price difference between parking bays and secondary homes. Data from Ricacorp Properties showed that the average price of lived-in homes was HK$9 million in May, more than four times the HK$2.14 million for a parking spot.

While the loan-to-value ratio for used homes priced between HK$8 million and HK$10 million is capped at 80 per cent, it is only 40 per cent for non-residential property like parking spaces.

For example, a spot costing HK$2.14 million would require an upfront payment of HK$1.28 million. And for a housing costing HK$9 million, a down payment of only HK$1.8 million would be required.

world record HK$11.9 million (US$1.53 million), Hong Kong’s sky-high home prices, Murray Road, determined by three factors, Parc City, Wharf (Holdings)

Parc City in Tusen Wan has only 87 car parking spots for 953 flats in the project. Photo: Martin Chan

What are the factors that determine the number of parking bays in a property development?

The number of parking bays in a development is determined by three factors: flat size, distance from subway station and plot ratio of site, according to the Planning Department. Developers of low-density projects with bigger flat sizes and distances of more than 500 metres from an MTR station have to set more space for parking cars.

For example, at Chinachem Group’s Parc City near West Tsuen Wan MTR station, the ratio of parking space per unit is 0.09. The project has 953 flats ranging from 427 sq ft to 859 sq ft, but only 87 vehicle bays.

At Mount Nicholson, the ratio is much higher at 1.5. The super-deluxe project has 48 flats, ranging from 4,200 sq ft to 4,600 sq ft, and 73 parking bays. Besides flats, Mount Nicholson also has 19 houses, each of which comes with space to park two cars.

What is the construction cost for a car park?

The estimated construction cost for a car park in Hong Kong is about HK$10,000 per square metre, about quarter the construction cost of a flat.

However, it is the cost of land that determines the price of a parking bay, making those located on The Peak much more expensive.

In July 2010, Wharf (Holdings) and Nan Fung Group paid HK$10.4 billion for the site on which Mount Nicholson sits. At HK$32,014 per square foot, it was the fifth most expensive land in terms of per square foot in Hong Kong. For a standard parking space measuring around 134.5 sq ft, the original land cost itself was HK$4.3 million.

News Related


Four Hong Kong restaurants with chef's counters where diners get to see ‘the dance' of kitchen staff in action – and the occasional mistake

Venezuelan-born chef Ricardo Chaneton tells of the time a compatriot started crying in front of him at Mono, his contemporary Latin American restaurant in Hong Kong. The diner, who had ... Read more »

Hong Kong restaurant reviews: Casa Cucina – a short menu of filling, homely Italian classics

Casa Cucina is everything you could ask for in a neighbourhood restaurant – a warm, welcoming and friendly vibe, delicious food at reasonable prices, and a comfortable environment. Too bad ... Read more »

Investors are getting rid of real estate; aviation starts decline | Financial

The AEX index trades 0.5% in the minus at 754.3 points around a quarter past twelve after having touched a record position the day before. The Midkap index falls 1.2% ... Read more »

On takes off: sports shoe brand co-owned by Roger Federer wins over pro runners and the public with its unique tubular cushion sole

Peter Rea signed a sponsorship deal with Swiss sports brand On in 2018 after more than a decade coaching runners in Reebok sneakers. “People were like, ‘Wait, who’s On?’,” recalled ... Read more »

Why stock market investing today is like flying in the 1950s

Most stock markets indices don’t want to go down. For a Hong Kong dollar investor, Mumbai is up 111 per cent since the Covid-19 low, the S&P 500 is up ... Read more »

BMW chases China car smugglers across Canada, their trail strewn with fake documents, bogus bank accounts

On April 15, a young man walked into a BMW dealership in Markham, Ontario, and signed a lease on a new X7 SUV, taking delivery of the C$140,000 (US$112,000) vehicle ... Read more »

Tech hub of Shenzhen drafts first rules in China guaranteeing kindergarten access amid private tutoring crackdown

China’s southern tech hub of Shenzhen, picked by Beijing to become a model socialist city, is drafting the country’s first detailed rules that would guarantee access to kindergarten, offering a ... Read more »

Mirror star Keung To on giving Hong Kong people confidence, song-making and how he started dreaming of being a singer

Strange warnings emerged on social media last month that a shopping centre in Tuen Mun, in Hong Kong’s New Territories, would be submerged, but instead of spreading fear the rumours ... Read more »

SPACs face ‘crowded' market for deals after blistering fundraising push this year, Hong Kong investment firm says

Special purpose acquisition companies (SPACs) are facing a congested market for potential merger targets – particularly those seeking technology unicorns – after an eye-popping amount of fundraising in the first ... Read more »

China's job scarcity sees fresh grads shun private sector for stable civil service jobs, as ‘government is too big to fail'

This is the fifth in a series of stories on China’s job market, looking at its history, the role of migrant workers, inequality and the future for its graduates entering ... Read more »

From Korean at Hansik Goo to a tasting menu at Neighborhood, via care packages during Hong Kong quarantine, my July was a feast of good eating

July was a record month for me: I ate out only twice. In normal times, it’s more like twice a week, at least. Don’t feel sorry for me, though: just ... Read more »

4 Olympic athletes who love K-pop: BTS, Blackpink and Mamamoo are all on these Korean sports stars' pre-competition playlists

This summer, Olympic athletes have not only grabbed the attention of sports fans but also that of K-pop fans, as they share a sense of unity around their love for ... Read more »

Covid has hit over 500 factories

About 1,500 workers at a textile factory in Nonthaburi province during their strike late last month, when they demanded management conduct mass Covid-19 testing after about 60 of their colleagues ... Read more »

No problem with big tech, if you only look at the numbers

Financially, they are all success stories. But the major changes that governments and regulators are working on can put considerable pressure on the business models of the groups. One or ... Read more »

Nongshim to raise prices of its instant noodle products

Photo by: Nongshim/Facebook Nongshim, one of the most popular instant noodle brands in South Korea, just announced this week that it will be raising the prices of its products. The ... Read more »

Andreessen-backed start-up to sell US$300,000 electric boats built by former rocket engineers

Arc, a start-up with a deep bench of former SpaceX employees, is entering the fledgling market for electric boats with a US$300,000, 475-horsepower pleasure craft. The Los Angeles-based company plans ... Read more »

Will the Delta variant derail Asia's economic recovery?

Worries about the spread of the highly transmissible Delta variant of Covid-19 has unnerved markets recently, given its potential to disrupt the global economic recovery. Jitters have focused on Asia, ... Read more »

Top 7 Furniture Choices For First-time Buyers

Everyone has a few important first-times in their life. First-time cycling, a first interview, a first job, a first house, etc. Following this, everyone will agree that first times are ... Read more »

Cross-border SaaS provider Keyouyun bags exclusive angel investment from Hangzhou Raycloud

Keyouyuan provides SaaS solutions to global e-commerce merchants that use platforms like Shopee, Lazada, Amazon, eBay, and Shopify. Read more »

Riskified's share price soars on IPO day, firm targets Asia in global expansion

General Atlantic-backed Riskified raised more than USD 367 million in an IPO on the NYSE less than a decade since its founding in Tel Aviv. Read more »

Video call startup Baijiayun's valuation hits RMB 3 billion following Series C financing from VMCapital

The ambitious video service provider wants to be the Chinese answer to Zoom, according to founder Li Gangjiang. Read more »

NCSoft announces ‘Blade & Soul 2' launch date

Photo by: NCSoft NCSoft is launching “Blade & Soul 2,” and the South Korean video game developer and publisher based in Seongnam already set the date. The company announced that ... Read more »

SoftBank confronts renewed China risk as Didi backfires

Beijing’s crackdown on US-listed tech stocks spells trouble in vital market. Read more »

Boeing cancels layoff plans as revenue starts to increase

Photo by: Boeing/Facebook Boeing will not lay off its workers anymore and this change of plans stemmed from the fact that the company saw increased revenue in the second quarter. ... Read more »

Test for entry system is hardly used, but costs €1m a day: VK

People waiting for a ‘test for entry’ test. Photo: DutchNews.nl The much criticized ‘test for entry’ system may be virtually dormant since clubs were closed again, but the 11 companies ... Read more »

Cancer charity to support independent probe into Tata Steel pollution

The IJmuiden plant at night. Photo: Tata Steel Dutch cancer charity KWF Kankerbestrijding is supporting the independent survey into Tata Steel and its impact on air quality set up by ... Read more »

Huawei's latest flagship phone comes with HarmonyOS but doesn't support 5G due to US sanctions

Chinese telecommunications equipment giant Huawei Technologies’ latest flagship smartphone does not support 5G connections as the company continues to lose relevance in the mobile phone market under Washington’s ban on ... Read more »

AEX steps on the brakes after winning streak; aviation in demand | Financial

The AEX index is down 0.6% at around a quarter past nine at 753.27 points after having touched a record position the day before. The Midkap index falls 0.7% to ... Read more »

Hong Kong regulators are reviewing appointment of State Street as Tracker Fund manager, sources say

Hong Kong regulators are reviewing the appointment of the manager of the city’s Tracker Fund to make sure local investors’ interests are well protected against any negative effects from a ... Read more »

AEX sinks under pressure from tech; good job Brunel | Financial

The AEX index is down 0.7% at around a quarter to ten at 752.97 points after having touched a record position the day before. The Midkap index falls 0.9% to ... Read more »

Hong Kong's US$700 billion July market sell-off evokes memories of China's 2015 stocks rout

Cathie Wood’s US$25.5 billion flagship investment fund began 2021 as one of the most enthusiastic, and biggest portfolio investors of Chinese technology companies listed in Hong Kong and the United ... Read more »

Fund manager nurses losses in China stocks after making a ‘mistake' in underestimating impact of education crackdown

The founder of Hong Kong’s Brilliance Asset Management said he made a mistake in underestimating the impact of Beijing’s reforms in the education sector, but struck an optimistic note about ... Read more »

Women's Festival Hong Kong offers expert advice on staying positive amid the coronavirus pandemic, dealing with bereavement and more

The Women’s Festival Hong Kong has built a reputation for its bold programming and this year, the fourth edition, it doesn’t disappoint. Acknowledging that we’ve all faced challenges over the ... Read more »

Corona concerns and dampers in quarterly figures weigh on Japanese stock market | Financial

Tokyo’s leading Nikkei went 1.8 percent lower into the weekend at 27,283.59 points, touching the lowest level since January 6, 2021. In July, the Japanese main index fell about 5 ... Read more »

‘AEX is slowing down after record hunt with a view to aviation' | Financial

Despite the relaxation of the corona measures, the French-Dutch aviation combination still suffered a significant loss. Real estate fund WDP and stainless steel maker Aperam also came up with figures. ... Read more »

Israel discovers links between Pfizer COVID vaccine and heart inflammation in young men

Israel’s Health Ministry said on Tuesday it had found a small number of heart inflammation cases, observed mainly in young men who received Pfizer’s COVID-19 vaccine in Israel, were likely ... Read more »

Tesla says it will stop accepting Bitcoin for car payments over environmental concerns

Electric car maker Tesla will stop accepting Bitcoin as payment, CEO Elon Musk tweeted on Wednesday, citing environmental concerns. “We are concerned about rapid increasing use of fossil fuels for ... Read more »

Store sales up again: clothes and shoes in particular popular | Financial

This means that the measured sales increases are slightly less strong than in May. Another factor is the fact that the sales in May 2020, with which the comparison was ... Read more »

Digital Dollar Project launches pilots for a potential US central bank digital currency

The US nonprofit Digital Dollar Project said on Monday it will launch five pilot programmes over the next 12 months to test the potential uses of a US central bank ... Read more »

Every Doge has its day: Dogecoin soars to new highs after being added to trading apps

Often regarded as a joke cryptocurrency, Dogecoin had the last laugh on Tuesday as its value soared by almost half in 24 hours during European trading hours. The value of ... Read more »