Hong Kong - AFP
Curbs on buying property in Hong Kong have cooled a market pushed sky-high by mainland Chinese investors. But the steps have sparked a craze for an unlikely new investment — the car parking space. The Asian financial hub slapped new taxes on residential properties in late October to rein in prices, amid growing complaints from Hong Kongers that buying even a tiny flat was now out of their reach. Mainland Chinese buyers were largely blamed for the increase in prices, which have skyrocketed 90 percent since 2009, as they flocked to the city with their new wealth amid the country\'s economic boom. Chief Executive Leung Chun-ying hoped the curbs would calm anger over the issue in the space-starved southern city of seven million, after previous promises of making more land available did little to help the situation. The curbs appear to be working but have also had unusual side-effects, with the city\'s imaginative investors now focusing on car parking spaces, which analysts say could hit an all-time high. The issue grabbed the public\'s attention with a single sale of parking spaces for HK$ 1.3 million ($ 166,666) last month, according to reports. It was the most expensive sale when tycoon Li Ka-shing\'s flagship Cheung Kong Holdings offloaded 514 car park slots for a total of HK$ 600 million. Some of the slots, located in the New Territories area of Hong Kong bordering mainland China, were reportedly quickly resold for profits of up to HK$ 300,000 each. People who sell the spaces said they had seen a surge in activity, which they believed was because the slots are not affected by the new taxes, as well as being maintenance-free and relatively cheaper than buying a property. They say car parking spaces were not previously a popular investment in a city which only has about half a million private cars and is well-connected by a vast public transport system. \"Parking was a very unattractive investment in the past. It\'s not easy to get rid of it so it\'s not a very tradable product,\" Josh Wong, who runs online car park trading website Parkinghk.com said. High property prices is just one source of rising tensions between natives of the semi-autonomous southern Chinese city, a former British colony, and the mainland Chinese who are arriving in increasing numbers. The curbs — a 15-percent stamp duty on non-permanent residents and corporate buyers as well as a higher stamp duty on the resale of property within three years — appear to have cooled the property market in general. New home sales have fallen nearly 50 percent since they were introduced and prices are also edging down, albeit slowly, estate agents say. \"Definitely it has had quite a significant impact on the transaction volume,\" said analyst Buggle Lau from Midland Realty. There were only 1,054 sales of first-hand residential properties in the month to Nov. 29, down 49 percent from the same period in October, according to a Midland survey that used official land registry figures. Prices had fallen, but by an average of less than one percent, Lau said. In Taikoo Shing, an area near the city center that is popular with Japanese expatriates, the average per-square-foot price has dropped two percent to HK$ 10,920 ($ 1,409), according to estate agent Centaline. The fall has made savvy investors turn to car parking spaces, but Centaline research head Wong Leung-sing warned that it was a risky investment. \"Once the economy slows, the first thing people do is to sell their cars, not their house,\" he said. \"But people have nowhere else to park their capital so they turn to high-risk products like this.\" Nevertheless, he believed the average price of a second-hand car parking space looked likely to break its historic high of HK$ 660,000 recorded in late 1997 before the Asian financial crisis. The average price of a space in the third quarter of this year was HK$ 640,000, he said.