Investors looking for new places to park their cash in Hong Kong are driving up prices for parking spaces, sparking fears of a bubble in the Asian financial center.
Prices for parking spots in Hong Kong are nearing historic highs, the side effect of government curbs to cool the housing market amid worries of overheating following the latest round of monetary stimulus in the United States last month.
There are "a lot of speculators in the market, especially for car parks," said Buggle Lau, senior analyst with Midland Realty. A bubble is "definitely forming."
Over the weekend, a developer sold about 500 parking spots at a new suburban apartment complex at prices of up to 1.3 million Hong Kong dollars ($167,000) per space.
In a commercial building near the city's financial district on Hong Kong Island, an investor has put 34 parking spaces on sale for HK$100 million ($12.9 million), according to a report last week in the Ming Pao newspaper.
Secondhand parking spaces changed hands in the third quarter for an average of HK$640,000. That's up 16.4 percent over the year before, according to research by property company Centaline. It's also not far off the record HK$660,000 in the fourth quarter of 1997, shortly before the city's property market collapsed.
Parking -- and other real estate -- in Hong Kong is expensive because both steep hills and past government policy to keep land supply tight means there is limited space to build on. Car ownership levels are relatively low, but so are the number of parking spaces. The city has 443,442 private cars and 479,000 private parking spaces, according to government data. -- AP