It is not a secret that the prices of apartments in Hong Kong reached values that are hard to meet by most investors these days, due to the impressive demand. But, what can one do if he or she has some money for investments? Apparently, the best move at the moment is to put money in parking lots.
How come this is such a good choice?
Well, only in the past year and a half, the value of parking lots doubled. Esther Fan, a woman that owns two parking lots in an old residential neighborhood enjoyed an increase of almost HK$90,000, which means US$272,630, as her lots jumped from HK$720,000 to the incredible value of HK$1.6 million.
If we are to look at these numbers, it is easier to see that it is more profitable to invest in parking lots, as the speed at which their value increases is considerably faster than the increase recorded by apartments. In the case of apartments, it took more than 7 years for them to reach a value growth of 120%, as the Centaline Property Agency showed through the data it released. Thus, if between 2010 and 2017, the prices of homes doubled in Hong Kong, the prices of parking lots tripled during the same period, especially those placed in residential areas. But, in spite of the fact that apartments are quite expensive in Hong Kong, their value never exceeds a growth of 100% during a whole year. When it comes to parking lots, that’s an entirely different story, as their increase in value easily goes beyond 100% in one year, as Mrs. Fan noticed.
So, what is it best to choose, an apartment or a parking lot?
Well, considering that most parking lots brought their owners gains of HK$1 million, some even bringing it profits of over HK$2 million, the choice appears more than obvious. If you want to enjoy a quick and consistent profit, then opting for a grid of land is the best way to go at the moment. For example, a parking area in a luxury zone of the city generated a staggering profit of HK$5.18 million or US$664,200 when it was sold. It is true that this is a record when it comes to Hong Kong, but it shows just how far things can go when it comes to parking lots. But, what triggered these incredible growths? It appears that the increasing number of cars in the city drove the demand for parking spaces up. Practically, the number of car owners in Hong Kong grew by 45% between 2006 and 2016, which means more cars that need to be parked somewhere. So anyone who had such spaces to sell or rent ended up making an impressive profit over the past months.
Unfortunately, the rising number of cars didn’t mean the appearance of more parking areas available around the city, as the availability of parking lots increased by only 9%. So, yes, we can talk about a shortage when it comes to parking spaces, which also explains why the prices of this particular zones increased so much lately. It appears that Hong Kong’s residents that are also car owners are willing to pay considering amounts of money to make sure that they have an available area for parking their cars.
New launch condos that come with 1-1 parking lots for the residents