July 9, 2018
Talk about “space travel.” Parking spaces now are so expensive in Hong Kong, that one car collector is thinking of storing his vehicles in Los Angeles, where annual spaces average less than one-tenth of the price.
“It’s crazy,” Darrin Woo, a classic car collector, told Bloomberg recently. Although he is wealthy, Woo just shipped his 1968 Mercedes-Benz 600 Pullman limo and a fiery red 1957 Fiat Abarth to California to save money on storage.
“Buy a space? No way. I could buy five cars for that much.”
Indeed, there are more cars than spaces in the confines of Hong Kong’s crowded 424–square-mile territory—and those who can afford to buy one might pay more than the rest of us would consider shelling out for a house. A single spot in a luxury development in Kowloon’s Ho Man Tin district changed hands recently for a record US$765,000, according to a July 5 report by the business news outlet.
The number of parking spaces increased just 9.5%, to 743,000, within the decade between 2006 and 2016; while the private car population surged 49% to 536,025, according to a report by the city’s Transport Department.
Today, the average Hong Kong parking space goes for about US$287,000—a more than sixfold increase since 2006. That makes the city’s housing market, the world’s least affordable, look tame by comparison. Home prices increased a mere 3.4 times over the same period. In the first half of this year, some US$1.3billion worth of spaces changed hands—up from US$838 milion in the same period a year earlier, according to Midland Realty Services, a Hong Kong-based real estate broker.
Car owners in New York and London face similar problems. In Manhattan, spaces at a luxury condo at 42 Crosby St. in Soho were advertised for US$1 million, according to The New York Times. A real estate agent who handles sales for the property declined to comment. However, prices are lower elsewhere in the city—pegged at an average of US$225,000.
In London, you can buy a space for about $130,000—or could in 2011, according to the Daily Mail.
Based on the Bloomberg report, Hong Kong developers are partly to blame. They make more money building apartments than garages, so the ratio of parking spots to housing units has declined, said Denis Ma, head of Hong Kong Research at consulting firm Jones Lang LaSalle.
Research contact: @Frederikbalfour