Hong Kong property investors find new avenue to park their money

HONG KONG Thu Nov 22, 2012 6:03am IST

1 of 3. A space is seen in between parked cars outside an office tower in Hong Kong November 21, 2012.

Credit: Reuters/Bobby Yip

Stocks

   

HONG KONG (Reuters) - Hong Kong investors are snapping up car parking spaces, raising fears of a bubble after government moves to cool soaring property prices last month drove speculators to seek new options.

One investor had put a total price tag of HK$100 million ($12.9 million) on 34 parking spaces in a commercial building near Western, said Sean Tsoi, a dealer at property development and investment agency AGW Holdings Ltd, referring to an area just five minutes by car from the heart of Hong Kong's financial district.

The average price for each space in the building was about HK$3 million, higher than the cost of a small apartment in some areas of Hong Kong, which is home to the world's most expensive residential and retail property.

"Car parks have become a new hot item," said Hanson Lam, senior property consultant at Midland Realty. "They're overpriced and I worry that there might be a bubble."

Lam said prices of parking spaces had jumped 20 to 30 percent since the government's latest property curbs in October.

Developers such as Sun Hung Kai Properties Ltd (0016.HK), Hong Kong's largest property developer, and Cheung Kong (Holdings) Ltd (0001.HK), controlled by the city's richest man Li Ka-shing, had sold more than 2,000 new parking spaces over the past two weeks, said Wong Leung Sing, research associate director at Centaline Property Agency.

Wong said sales of new parking spaces had surged about 50 percent so far this month although he was not alarmed.

"It's a simple logic for investors: if you don't allow me to buy residential properties, then I will turn to parking spaces, and it's still more profitable than putting money in the bank," he said.

Hong Kong leader Leung Chun-ying, who took over on July 1, earlier this month expressed concern over the impact of hot money flows into the city after the U.S. launched a third round of quantitative easing in September.

"Capital is flowing into Hong Kong, into its property market. Some people buy luxury properties, we've seen soaring prices there ... money is also flowing into shops, commercial premises and car parks," Leung said.

An inflow of hot money forced the city's central bank to intervene last month to protect its currency band for the first time since the global financial crisis.

The government imposed property cooling measures on Oct 26 to rein in residential prices, which jumped 20 percent in the first nine months of this year.

(Editing by Nick Macfie)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Trade Deal

REUTERS SHOWCASE

Bullish on Equities

Bullish on Equities

Bullish on Indian equities, but gains seen 'less sharp'- Goldman Sachs  Full Article 

Facebook Results

Facebook Results

Second quarter revenue increases 61 percent  Full Article 

BRICS Bank

BRICS Bank

World Bank chief welcomes new BRICS development bank.  Full Article 

Streamlining Operations

Jet Streamlines

Jet Airways chairman says looking to restructure debts, talking to bankers  Full Article 

Political Economy

Political Economy

Analysis - Watch what markets don't do as world politics turns nasty   Full Article 

Photo

Honda's India Thrust

Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec   Full Article 

 Boosting Output

Boosting Output

NMDC plans to boost iron ore output by two-thirds  Full Article 

Apple Results

Apple Results

Apple margin concerns fade, focus shifts to iPhone launch  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage