A Hong Kong parking space has sold for more than €550,000, setting a new record in the world’s least affordable property market.
Hong Kong is one of the world’s most densely populated cities and prices have been driven up over the past decade by a shortage of new supply and strong demand from local people and mainland Chinese.
Property prices started to fall last year because of concerns about the slowing economy in Hong Kong and China. But with the currency pegged to the US dollar, the market has bounced back in recent months because of expectations the US Federal Reserve will keep interest rates low for longer.
The parking space at 55 Conduit Road, in the exclusive Mid-Levels district high above Hong Kong’s financial centre, was sold for HK$4.8 million €566,000 this week, according to filings with the Land Registry.
That makes it one of the world’s most expensive parking lots. The amount paid would cover the cost of about 120,000 taxi journeys between the apartment and the city centre, equivalent to two commutes every working day for 245 years. “The demand for parking spaces is pumping up the price,” said Wong Leung-sing, a researcher at Centaline, a real-estate agent. “It’s not because people are crazy.”
Billionaire Jack Ma
Mid-Levels and the adjoining Peak are the most expensive districts in Hong Kong, home to diplomats, executives and billionaire tycoons such as Jack Ma, the founder and chairman of e-commerce group Alibaba.
The parking space came with a 152sq m (1,636sq ft) apartment that was acquired by a Chinese couple for HK$56 million this month. They then sold it to Jared Margolis, another resident of the building, which is described by its developer as “the address to impress”.
Cliff Tse of real-estate group JLL said the transaction had surpassed the previous record of HK$4.4 million for another parking slot on the same road. “The buyer must be quite desperate for a second parking space,” he said. “The seller asked for a premium above the benchmark and it’s reasonable because if they want to sell their flat later without a car-parking space, this will affect the marketability.”
Hong Kong has the world’s least affordable housing, with the median housing price 19 times the median annual pre-tax household income, as measured by Demographia, a US consultancy.
Parking lots are also at a premium, with 1,574 spaces changing hands in the third quarter this year at an average price of HK$1.3 million, according to Centaline.
– (Copyright The Financial Times Limited 2016)