"In some car parks, especially in urban areas where supply is limited, the sales price of some car parks (spaces) can be as high as two to three million (Hong Kong) dollars" each, said Lau.
Nearly 8,400 parking spaces worth HK$5.6 billion changed hands in the first 10 months of this year, compared to 8,300 such transactions worth HK$5.4 billion for all of 2011, according to Land Registry data compiled by Midland.
Some of that increase comes from developers like Cheung Kong Holdings, Sun Hung Kai Properties and Chinachem Group selling off parking spaces at their apartment complexes. It's a break from the usual practice of renting them out to residents, and is a sign that the developers realize it's a "pretty good time" to sell because of the prices they can get, Lau said.
Because Hong Kong's currency is pegged to the U.S. dollar, policymakers cannot take conventional measures to cool property prices like raising interest rates.
So the government tightened restrictions on property purchases, including bringing in a new stamp duty on foreign buyers. But parking spots and other non-residential property are exempt.
"The latest overseas buyers' stamp duty will just put some fuel onto that fire, and is making the whole parking space investment market go out of control," said Josh Wong, whose Hong Kong City Parking owns about 200 parking spots at eight lots around Hong Kong.
Many investors who buy spaces rent them out to car owners. Wong said he typically looks for an annual yield, or return, of 5 to 6 percent, but because prices have risen, yields have been falling to about 4 to 5 percent. He said has even heard of investors making as little as 1.8 percent on their investment.
Wong said the parking space market was heating up because investors didn't need a lot of money to get started.
"One million Hong Kong dollars ($129,000) cannot buy anything in Hong Kong. You cannot buy a shop, you cannot buy anything except car parking and that would help the car park investment go even more crazy," he said.
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