In Hong Kong, owning a car is a luxury, not because of the price of buying and maintaining it, but because of runaway parking costs.
And the situation just keeps getting worse.
In some areas, the monthly rent for a parking spot can get you a two-bedroom apartment in the New Territories.
Hot money is to blame.
The global market is flooded with cheap money after the European Central Bank implemented its own quantitative easing in January and some central banks announced rate cuts in recent months.
With yields on residential properties down to a measly 2 to 3 percent amid surging home prices, a parking slot, which gives a return of about 4 percent, is a more lucrative investment alternative.
The smaller lump sum also makes it affordable for investors. Most parking spaces are selling in the HK$1 million (US$129,000) to HK$2 million range.
But yield-hungry investors and people seeking quick cash are combining to push parking costs higher.
A parking slot in The Belcher’s, a residential real estate in Kennedy Town on the west side of Hong Kong Island, was recently leased for HK$8,500 a month.
Earlier this month, a parking spot in Shun Tak Centre in Sheung Wan changed hands for HK$4 million.
Land Registry data shows there were 1,293 car park transactions in February alone, up 19 percent from January.
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