Hong Kong punters dive into parking lots, sending transactions to registrations amid stamp duty cut
A limited supply of parking spaces in Hong Kong, coupled with the elimination of double stamp duty, has whetted investor appetite for this corner of the real estate segment, which is expected to push revenue to an all-time high this year.
A total of 9,600 parking spaces in the city are expected to change hands in 2021 with a value exceeding HK $ 18.5 billion ($ 2.37 billion), erasing the previous record of HK $ 16.6 billion in 2018, according to a research note from Centaline Property Agency.
The number of transactions will also be the highest since 2015 when 10,016 transactions were completed. However, they will be lower than the record 12,628 transactions in 2012. The number of transactions this year is estimated to be 70% higher than the 5,658 transactions last year, while the value is expected to increase 76% from the previous year. HK $ 10.5 from last year. billion.
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âThe numbers show that parking spaces are surrounded by a strong buying interest and that investors are zealous to own them,â Wong Leung-sing, senior associate director of research at Centaline wrote in the report.
The removal of the double stamp duty, known as the Doubled Ad Valorem Stamp Duty, at the end of November last year rekindled investor appetite for the segment, analysts said.
The tax was introduced in February 2013 to curb speculative activity in the real estate market. He doubled the stamp duty rates across the board, but they returned to their original rates after the rollback.
In the first 11 months of this year, 8,788 transactions worth HK $ 17 billion were recorded, Centaline said. In November, 886 parking spaces changed hands, 25.3% more than the 707 transactions in October. The value of the transaction increased 22.9% month-on-month to HK $ 1.58 billion.
Why does a parking space in Hong Kong cost more than an apartment in London’s upscale Knightsbridge district?
âThe lack of car parks in certain areas, in particular densely populated neighborhoods, has led to heavy investments [sentiment]”said Rosanna Tang, research manager for Hong Kong and the Greater Bay Area at Colliers.” They have become good investment choices because there is no need for maintenance and no cost of renovation. is not involved. “
The average cost of a parking space is less than HK $ 3 million, which makes it easy to own due to the lower amount at stake, Tang added.
In May, a parking spot sold for a world record HK $ 11.9 million at the exclusive Mount Nicholson development on The Peak. A 735 square foot apartment in Sloane Court East, in London’s upscale Knightsbridge neighborhood, costs a little less.
Centaline, however, did not provide data on specific prices for individual parking spaces in different parts of the city.
The Covid-19 pandemic and an economic recession have also had minimal impact on parking spaces in Hong Kong, with investors looking for good buys amid shortages in densely populated areas.
Large purchases and trades of parking spaces will continue amid expectations of further price hikes, analysts said.
Peter Yuen, managing director of investments and sales at Savills, said parking spaces on Hong Kong Island and Kowloon will be highly sought after by investors due to the scarce supply.
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