In Melbourne's Exhibition Street at $65,000 you can have a car space ... but no car. Photo: Cocoon Real Estate Think housing is expensive? What about this Sydney car space, on the market for a staggering $400,000?
For just over a third of the city’s median house price, you might want to sleep on this premium slab of concrete yourself. But instead it will be your car – or two – enjoying one of Sydney’s most sought-after locations.
The tandem spot, part of the Mantra 2 Bond Street complex, is just a short stroll from the ASX, The Rocks and the Sydney Opera House.
At $17,750, this car space for sale in St Kilda almost seems like a bargain. Almost. Photo: Professionals Whiting&Co
Seller Terence Chuh has had multiple inquiries, but says most potential buyers are searching for a single space, rather than a double.
“I think the last sale for a single car spot was $188,000 – that was about three-and-a-half years ago,” he says, noting that it’s rare for a car park to be sold on a separate title to an apartment.
Chuh says the building’s car parks generally fetch a monthly rent in “the high 900s” for a single car space, or about $1100 for tandems.
Six figure sum: This car park in Surry Hills carries an asking price of $135,000. Photo: Richardson & Wrench Kogarah
But he’s in no hurry to sell, believing his money is better off invested in car parking than earning low interest rates in the bank. If anything, he’s thinking about upping the price.
But at $400,000, surely he’s dreaming?
Actually, says Francis Armstrong, founder of website Findacarpark, the asking price is realistic. “The location is absolutely bang-on.”
Armstrong says when it comes to this type of investing, location is the number one factor.
“If you have a car park in the inner city it will always be rentable,” he says. “In fact the biggest challenge for us is actually stock.
“A car park is like gold – it’s a finite resource.”
A secondary consideration is access and security. Armstrong says a space with a roller door or secure door is valuable because it can double up as storage.
On his website, the most searched locations in NSW are Sydney, Woolloomooloo, North Sydney, Surry Hills and Darlinghurst. In Victoria it’s Melbourne, South Melbourne, East Melbourne, Docklands and Southbank.
According to Findacarpark’s statistics from the March quarter, the average price across New South Wales was $73,000 for a single car space, followed by Victoria on $51,000 and Queensland on $45,320.
Over the same timeframe, NSW car spaces – the most expensive on the site – recorded returns (or rental yield) of 6 per cent. In Victoria that figure was 9 per cent, eclipsed by Queensland and WA, both on 13 per cent.
Armstrong says several factors, including poor public transport options and new planning rules limiting the number of car parks in high-rise developments are also pushing car park prices skyward. “We’re seeing the ratio of car parks to apartments becoming less.”
If $400,000 is out of your league, there are a few cheaper options on offer.
This level two car park in Melbourne’s Docklands precinct is going for $57,000, featuring such amenities as a security bollard and easy access to the lifts.
In Liverpool, Sydney, a seller has advertised 10 car spaces (two have already sold) for $33,000 each on Gumtree.
A tiny, 10-square metre parking space in Sydney’s Liverpool Street – squished between a handrail and a concrete rail – sold for just over $60,000 in April, with the agent noting that most cars wouldn’t be able to even fit in the spot.
In Hindley Street Adelaide, close to the city’s casino and convention centre, you’ll have a better chance of being able to open your car door in this CBD car space, selling for $43,000.
Armstrong says Brisbane is another hot spot for car park sales because of poor council planning and expensive street metre parking.
This Brisbane city car park, in Spring Hill, is on the market for $48,000.
So who actually buys car parks?
Armstrong says it can vary widely, from inner-city workers, to super funds, mum and dad investors and large investors.
As with buying any kind of property, buyers must fork out for stamp duty, council rates and body corporate or strata fees.
Beyond that, there’s virtually no upkeep — “unless you’ve got a bomb parked in your car park and it leaks oil, that’s all’,” says Armstrong.