HK car park investment craze raises bubble fear
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Investors looking for new places to park their cash in Hong Kong are driving up prices for parking spaces, sparking fears of a bubble in the Asian financial center.
Prices for parking spots in Hong Kong are nearing historic highs, the side effect of government curbs to cool the housing market amid worries of overheating following the latest round of monetary stimulus in the US two months ago.
There are "a lot of speculators in the market, especially for car parks," said Buggle Lau, senior analyst with Midland Realty. A bubble is "definitely forming."
Over the weekend, a developer sold about 500 parking spots at a new suburban apartment complex at prices up to 1.3 million Hong Kong dollars USD 167,000 per space.
In a commercial building near the city's financial district on Hong Kong Island, an investor has put 34 parking spaces on sale for USD 12.9 million, according to a report last week in the Ming Pao newspaper.
A parking spot in the exclusive Repulse Bay neighborhood sold for HKD 3 million, the paper also said, citing Land Registry data.
On Thursday, a single parking spot in a building in the popular Mid-Levels residential neighborhood will be auctioned off with the opening bid at HKD 680,000.
Second-hand parking spaces changed hands in the third quarter for an average of HKD 640,000. That's up 16.4 per cent over the year before, according to research by property company Centaline.
It's also not far off the record HKD 660,000 in the fourth quarter of 1997, shortly before the city's property market collapsed.
The rising prices are a side-effect of recent measures to cool Hong Kong's housing prices, which have doubled since the end of 2009 and are among the highest in the world.