London isn’t the only city where parking has become valuable real estate. As real estate values soar in many of the world’s space-strapped cities, people are willing to pony up a premium for parking spots.
Last year a 12 sq m parking spot in the Sydney suburb of Kirribilli went for A$120,000 ($90,900) at an auction. That was not long after another spot in the Australian city went for A$260,000 ($195,150). In Hong Kong’s high-priced real estate market, one executive owns two spaces in a downtown skyscraper reportedly worth $640,000 each. It’s also a trend in cities like New York and Boston.
For high-end home buyers, spending six figures or more on a parking spot “is very much equivalent to a regular Joe buying a home in the suburbs for $200,000 and having to pay $50 to $100 for homeowner’s fees,” said Rick Palacios Jr, director of research at John Burns Real Estate Consulting in Southern California.
Bentleys on the street
Like residential real estate itself, local trends drive the market for parking spots.
In London, for example, the values of parking spaces have grown in recent years, said Charles Cridland, founder and technical director at YourParkingSpace, an online parking booking site. He said that two types of investors are buoying London’s market.
The first is primarily high-end residential buyers, who want to secure a parking spot near their valuable homes. While many newer developments offer residents a chance to buy a space in the building when they buy a flat, in more established neighbourhoods with less construction, residents snap up any available space that comes onto the market. And those spots may not necessarily be in covered garages or parking lots – individual street spaces can also have leases.