Date
24 May 2017
The Murray Road Multi-story Carpark (inset) and other high-volume car paks will be demolished to make way for more high-yielding commercial premises. Meanwhile, car growth is outsripping car park supply. Photos: HKEJ
The Murray Road Multi-story Carpark (inset) and other high-volume car paks will be demolished to make way for more high-yielding commercial premises. Meanwhile, car growth is outsripping car park supply. Photos: HKEJ

The economics of parking cars in Hong Kong

Just like the housing issue, the shortage of carparks in Hong Kong is more acute that it has ever been.

Transport Department data says it all.

The number of licensed private cars surged 45 percent to 584,000 in 2016 from 402,000 in 2006.

However, the number of parking spaces for private cars rose a dismal 9 percent to 662,000 in the same period.

You may think the number of parking spaces was still more than that of private cars but an annual growth rate of 3.8 per cent for private cars has worsened the  parking space/vehicle ratio even more. 

A private car needs more than one parking space on average because it requires parking spaces both at the home and in the destination — unless the car is not moving.

Worse still, there is no end to the imbalance of demand and supply.

The wealth effect from the property and stock markets made car purchase more affordable, resulting in a bigger headache for the government to control private car growth.

Like other major cities, Hong Kong cannot build roads and car parks continuously to match private car growth, the Transport Department said in a paper presented to a Legco panel.

“In the Hong Kong 2030+ Study on development strategies, the government has pointed out that doing so will exert pressure on land development in the long term and is unsustainable.”

To limit car growth, the SAR government cited a law in Tokyo which requires the car buyer to produce a certificate of availability of parking space within two kilometres of their place of residence before the purchase can proceed.

Or simply to make cars more expensive. Earlier this year, Financial Secretary Paul Chan cancelled a first-time buyer subsidy for Tesla which effectively saw an 80 per cent surge in the price of the car.

But a major reason the shortage will continue – hence a continued and substantial increase in parking fees – lies in a decrease in supply.

The Murray Road Multi-story Carpark, Star Ferry Carpark and Rumsey Street Carpark in Central and Western District, along with the Yau Ma Tei Multi-story Carpark and Middle Road Car Park in Tsim Sha Tsui will be demolished to make way for higher-yielding commercial premises.

The government also fell into a dilemma in identifying suitable land for building car parks.

Building car parks, especially underground ones, are expensive in construction and operating costs.

As the Transport Department stated, the limited land resources in Hong Kong do not permit the government to endlessly provide additional parking spaces to cope with the continuously high private car fleet growth.

An obvious conclusion: The price of parking will surge. In fact, it has already done so.

The price of a car parking space, measuring a standard 2.5 meters by five meters, is synchronized with, if not more than, the price of a home.

Poor Hong Kong car owners!

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BK/AC/RA

EJ Insight writer

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