Great read on automated parking spaces being a main driver for sales.
JNL's own John Roy was interviewed by the Valet Spot about parking investing (of course). It's a candid interview that any new or experienced parking lot investor will benefit from hearing.
Today, we are excited to have on the show, John Roy of JNL Parking, a company that provides parking lot broker services. He’s also an investor, a certified parking professional, and an operator in the parking industry.
On this episode of The Valet Spot, John shares his expertise in the field of investing and increasing the value of parking lots.
Tune into to find out detailed information about which parking lot features and services have the best return on investment. You’ll also find out how to communicate effectively with a parking lot owner so that the doors of opportunity may open and start you on your parking lot investment journey.
Listen to This Interview to Learn:
This is the kind of news you want to read if you are a parking investor. It confirms once again that parking is a scarce resource and when developers are hungry for land it's the first place they turn to fill the need. Here are two recent articles that highlight that this trend is not going anywhere in the near future:
Sayonara Parking Garage, Hello Ubiquitous Luxury Housing
April 9, 2014, by Zoe Rosenberg
It seems the Post has also caught onto the trend that parking lot parcels are being snatched up and converted to luxury condos. This time, talk centers around an Upper West Side garage on West 77th Street between Broadway and Amsterdam Avenue. The for-sale lot is being marketed as a residential teardown that can be expanded from its current 7,700-square-feet to 77,000-square-feet. The Post expects the lot will fetch in the ballpark of $61 million, or $800 per square-foot, thanks to its neighbor, the luxury rental development The Larstrand.
The garage at 219-233 West 77th Street is not the only lot to grace the market with development aspirations. There have been quite a few before it; a few of which we mapped. The Post notes that Finance Department statistics declare a loss of five parking garages in Manhattan in the last two tax years. In the past, Brooklyn has seen a loss of 40 garages, the Bronx has given up 30 garages, and Staten Island has lost three garages. The trend extends most heavily in Queens, where 44 garages have been snatched up for development in years past. The trend accompanies a privatization of parking spaces—found increasingly under new luxury rental and condo buildings—making it even more of a challenge and a privilege to have and park a car in the city.
Upper West Side Garage to Turn into Cushy Condos
April 8, 2014, By Lois Weiss
Another Manhattan garage building will bite the dust to be reincarnated as a place to park people.
The Upper West Side garage at 219-223 W. 77th St. is on a plot of 7,700 square feet. Sources said it is being marketed as a residential tear-down that can be redeveloped to 77,000 square feet.
Located on the north side of the street between Broadway and Amsterdam Avenue, and next to the new 20-story Larstrand rental, it would not surprise us to see bids rising to or above $800 per square foot — more than $61 million.
Calls to the Avison Young marketing team of Vincent Carrega, Neil Helman, Jon Epstein and Charles Kingsley were not returned.
Like other brokerages, this group has been active in the garage-sale market. Finance Department statistics show Manhattan had 865 garages in the tax year 2012-2013, but 860 in 2013-2014 — a loss of five garages and an untold number of spaces.
It also seems more are being marketed every day.
Brooklyn, the land of the hipster bikester, is losing even more — so far, 40 have bitten the dust.
Thirty are gone in the Bronx and three in Staten Island.
Queens is the biggest auto-space loser, however, as 44 went down for the count.
The good news is that the city’s tax rolls will increase as expensive luxury apartments take the place of these lower-valued garages. The bad news is that finding a place to park a car is getting a lot harder.
While a few parking spots have already been sold as a condo development perk, we predict that some entrepreneur will buy or take their current garage building, split it up, and sell all the spaces as car condos.
Nobody can ruin your parking business like the government can. We hope these Tampa airport parking lot owners fight these fees until the end. No one should have to compete with Uncle Sam. What do you think?
TAMPA -- The price of parking at privately operated, off-site lots serving Tampa International Airport passengers could increase if a new 8.5 percent Hillsborough County Aviation Authority "privilege fee" on gross parking sales is imposed, the president of A-1 Express said Monday.
Del Smith said he will meet airport Chief Executive Officer Joe Lopano Wednesday in hopes of revising the rate of the fee, which he said eventually could be passed on to customers in the form of a tax if the airport's current plan moves forward.
Smith said his lot and two others -- another three have gone out of business in the past year or so -- save consumers $2 or more a day over the airport's $9 daily fee at its economy lot and provide valet service at the same base cost to the elderly and others who cannot easily navigate airport parking where valet service costs $25 a day.
"We understand the airport needs to recoup revenue," said Smith, who also is contacting the aviation authority board members who approved the policy earlier this month and are scheduled to vote on the final agreement Nov. 7.
"We have had a free ride from a privilege fee for the 19 years we have been in business, but I just want to determine if there is any way else we can look at this," Smith said.
Case law indicates that businesses using airport facilities to make a profit from airline customers can be charged for their use of airport property, Tampa International spokeswoman Janet Zink said.
"What we are doing is not unprecedented," Zink said. " Revenue generated from the privilege fee will help maintain the airport facilities, including the roads and curbsides the off-airport parking companies use.
"If the off-airport companies choose to pass the privilege fee increase on to their customers, they still will maintain their niche as a lower-cost alternative to the convenience of on-airport parking."
The airport increased its parking rates effective Oct. 1. But those rate changes at the short-term and long-term garages affect only about 10 percent of the travelers using them, because most people either park for less than one hour, which is free, or for at least a day, which has a price cap.
The maximum daily rate for the economy garage remained unchanged at $9 a day, along with the daily rate at the short-term garage that remained unchanged at $20, while the maximum daily rate at the long-term garage increased $1 to $16.
Parking usage at the short-term garage increased 4.6 percent since Oct. 1 compared with a year ago, Zink said, despite the rates doubling from $1 to $2 for each additional 20 minutes up to the $20 daily maximum.
It's not the punch line to a joke, but rather a bizarre event that you have to see for yourself. In the spirit of Halloween, even the Parking Industry can become a little weird.
JNL Parking can help keep you away from these scary investments! Happy Halloween!
As a private parking owner, this can only make you smile. The city keeps making it harder to park, and our private parking lots will continue to fill to capacity! Great read:
L.A.'s broken-parking-meter scheme may soon expire
July 8, 2013
Remember the scene early on in “Cool Hand Luke” when Paul Newman whacks the heads off those parking meters?
I loved it. You did too -- admit it.
I don’t know whether that’s one of Mike Gatto’s favorite movies, but I hope so. He’s the Los Angeles Democratic assemblyman who wrote the bill that would smack down cities like L.A. that ticket people for parking at meters that turn out to be broken. L.A. sticks Angelenos with a $73 ticket.
It’s one of the city’s more cynical ways of making money, and Gatto wants it to stop. We already pay, as he points out, “for street maintenance, meter installation and meter upkeep.” Cities should spend their time and treasure keeping the meters working, “not squeez[ing] a double penalty out of cash-strapped citizens.”
(The bill has been passed by the Assembly and state Senate and sent to the governor.)
Did Mike Gatto ever get ticketed for parking at a broken meter? Was that the spark to the legislative fuse? I hope that’s true too.
I’ve parked at a meter, put in my money, found it broken and dutifully called the city to report it. What did the dame at the other end of the phone say to my good-deed-doing? “Move your car to another meter.” No refund, no credit, no thanks.
One in 10 L.A. city meters is broken. Many have been vandalized, although less picturesquely than in “Cool Hand Luke.” The city, like the Napoleonic Code, assumes that we are all vandals, jamming the meters to save ourselves six bits. Thus, we cannot benefit from our crime by parking free at a broken meter.
Why did it take an assemblyman to try to fix this? Why didn’t some City Council member introduce a piece of city legislation to do this?
Follow the money; follow the coins. I bet you a roll of quarters that the city does not use that $73 fine to fix the parking meters. I bet you that the city puts that $73 fine into the general fund and goes merrily along, congratulating itself on what a crafty little cash cow it’s milking. Broken meters may very well make more money than working ones; how’s that for a slick deal?
Of course people can cheat the parking rules -- does that give the city permission to out-cheat them? Enforce fair rules fairly and people won’t have grounds to complain when they get dinged for breaking them.
The new meters that accept coins or credit cards are crowding out the coin-only meters. There are nearly 40,000 of them, and fewer than a dozen are broken at any one time. If this is not a problem that will fix itself, then maybe Gatto’s bill will.
The city could do us all a bigger favor by going after the abuse of handicapped parking placards. People use fake ones, or they abuse the ones issued to their disabled relatives. You’ve seen these drivers at the grocery store or the mall. I have. A car wheels into a handicapped spot and two nimble young folk leap out and saunter off.
That’s not how it works. The handicapped person has to be in the car for the placard to apply. The city creates a scofflaw culture when it doesn’t bother to bust these crooks. On some streets in downtown L.A., every single car parked at a meter has a handicapped placard.
Sic the parking enforcement team on a few blocks of the city at a time, catch the creeps in the act and bust them big-time: Take away the placards, tow the car, fine them the same three figures that the able-bodied pay for parking in handicapped spots and note it on the cars’ records. The cheats undermine the entire handicapped parking program.
Enough L.A.-bashing. Let’s switch to Santa Monica, where the city of kumbaya sentiment has re-engineered its parking meters so that if you drive away with any time left on the meter, it’s wiped out.There’s little enough fellow-feeling around here as it is. Finding a few cents’ worth of time left on the parking meter -- or the benevolent sentiment of leaving it for a comrade-in-traffic -- is one of the few civic sharing moments we have.
Los Angeles council member Tom LaBonge has looked warily to the west and says L.A. had better not follow Santa Monica’s suit.
A few free meter moments add "a certain joy in life in the city of Los Angeles," he said. "I know they have it in their playbooks, and I don't want them to call that play."
And don’t even think of committing the random act of kindness of feeding someone’s expired meter. You can get arrested for that. Nice.
In the spring of 1979 Jerry Buss had a serious problem. As he flew over the Las Vegas desert thoughts of his meeting with Jack Cooke raced through his mind. Cooke had set a deadline and the escrow company had put in a final call for $3 million to close the deal on buying the Los Angeles Lakers.
Dr. Buss’s problem was that he was completely tapped, and his meeting with Cooke to work out a deal for the remaining $3 million had not gone well. He had less than 24 hours to come up with $3 million or watch his dream of owning an NBA team evaporate.
We can only speculate on what he was thinking on the flight back to LA, but the 1 hour flight must have seemed like an eternity. Like most winners in life, he exited the plane and immediately began to work.
His business partner Frank Mariani was able to secure a $2 million loan and Buss was able to secure the remaining $1 million from another investor. Then, with only a few hours left, Buss’ investor dropped out leaving him and his partner $1 million short.
With time continuing to work against him, Buss was forced to turn to an unlikely ally who many did not want to be indebted to... Donald Sterling (future owner of the Clippers).
While Jerry Buss became ridiculed for paying a record price for any sports franchise at the time, and being leveraged to the hilt, Buss was able to see not just a price tag of $67.5 million dollars for the transaction, but 3-4 separate assets within the purchase that if broken up could produce significantly more value than one asset alone. He would go on to prove his critics wrong.
Similar to the Lakers transaction, we advise our investors to look beyond the initial price tag or cap rate in order to see value where other investors do not. We look at three simple parameters when valuing any parking asset. These parameters are very similar to Dr. Buss’s investment model and help investors determine their own cap rate.
1) Are there other income producing assets that can be broken off and sold separately?
In the summer of 1979, after closing the Lakers deal, Dr. Buss embarked on a similar model to that we use for parking.
Rule #1 (Look for additional or increasing sources of Revenue)
Or as Chick Hearn, the long-time voice of the Lakers used to say, “The game’s in the refrigerator! The door is closed, the lights are out, the eggs are cooling, the butter is getting hard, and the Jello-O is jiggling”
On March 27th 2012, the news broke of the sale of the Los Angeles Dodgers by Frank McCourt to an investment group led by former basketball star Magic Johnson and the Guggenheim group for an eye popping $2.15 Billion dollars. The sale of the Dodgers was almost three times the previous record set by any MLB team (Chicago Cubs just 3 years earlier). The sports community was intrigued, the business community perplexed, and the general public shocked. How could a man that was bankrupt, unable to meet his team’s payroll, and hounded by legions of attorneys relating to his ex-wife’s divorce pull off such a shocking deal? In just 8 years time, McCourt was able to purchase arguably one the most historic Major League Baseball franchises - with no money out of pocket (pledging his parking assets in Boston) - and turned it into a $2.15 Billion dollar pay-day.
The media had gone so far as to make fun of his business background by labeling him “the parking lot attendant” and publicly mocked him by telling him to leave LA and to return to Boston to park cars.
In a case of irony, McCourt must have listened to his critics, because behind the headline of the $2.15 Billion sale, very few people noticed that he actually took the media's advice and really did return to parking cars. You see, in the $2.15 billion dollar sale of the Dodgers, he negotiated to keep the parking lots and have the Dodgers lease back the property to his newly created company, “Blue Land”.
McCourt, through Blue Land, purchased the parking lots for $140 Million, while leasing the parking lots back to the Dodgers for $14 Million annually. While a 10% Cap rate may seem like a good deal, when one considers that McCourt paid in essence nothing for the land, it becomes the mother of all cap rates, payback periods, and sweet revenge.
If we analyze this further and apply a 6% cap rate to value the parking asset, we find that the value of his parking lot at Dodger Stadium is worth an estimated $233 Million! (and as much as $1 Billion in redevelopment value although JNL believes that one day the land deal will be worth more than the $2.15 Dodger deal). Furthermore, there are steep increases built in beginning in 2015 and every 5 years thereafter.
In a hypothetical case, the Dodgers are landlocked (talk about striking out), and may have no choice but to pay any price that McCourt could demand in the future. If you think that the Dodgers can do anything about it, they may not be able to. If McCourt decided to increase the annual parking lease to $150 million annually from the current rate of $14 million, the Dodgers might have to pay. If he increased it to $300 million annually, the Dodgers might have to pay. In fact, short of moving the team to a new location, they are at the mercy of the Parking Pirate (as some bitter fans have called him). Whatever nicknames McCourt may have accumulated during his time with the Dodgers, we at JNL prefer to call McCourt, the "Parking Genius".
If the Guggenheim group had contacted JNL, we would have negotiated a deal to keep the parking lot for the group, or at least purchase a controlling interest in Blue Land. Although not verified, according to some unconfirmed sources, the parking contract could expire as early as 2025, after that, watch out! Blue Land could change their name to Blue Sky.
Don’t be taken by parking pirates, baseball bandits, or land sharks. At JNL Parking we can help you negotiate a sale of your parking asset that will not leave money on the table, or expose you to some risks that may have been previously unforseen. In fact, we have been contacted by owners to help analyze their expiring leases, negotiate longer term leases with current clients, and to research fair market values for their lots and garages.*
Contact JNL Parking today to avoid striking out.
We’re ready when you are,
John & Lance
* This article was written as a case to illustrate the power of a parking investment in relation to sports and contracts. The figures used in this article are not a case of insider information, but rather information widely available. This is not a criticism of any party involved in the above mentioned transactions and is simply an educational op-ed piece by JNL Parking.
Birth of the Parking Stall
In 1898, Delegates from across the globe gathered in New York City for the world’s ﬁrst international urban planning conference. One topic dominated the discussion. It was not housing, land use, economic development, or infrastructure. The delegates were driven to desperation by...horse manure.
The situation seemed dire. In 1894, the Times of London estimated that by 1950 every street in the city would be buried nine feet deep in horse manure.
All efforts to mitigate the problem were proving woefully inadequate. Stumped by the crisis, the urban planning conference declared its work fruitless and broke up in three days instead of the scheduled ten.*
During the late 1800‘s Americans depended on the horse for all aspects of their lives. In fact, as human population in some cities rose an astonishing 108 percent, horse populations increased over 300 percent during the same time period. This meant that horses had to be fed, maintained and most importantly...parked.
In booming areas such as New York City, a very lucrative business was born. By the turn of the nineteenth century 4,600 boarding stables had been developed to park 74,000 horses. In prime areas such as “Stable Row” in the Upper West Side on Amsterdam Ave, boarding rates soared and the value of the land began to increase.
As the automobile began to replace the horse just decades later, many of the parking stables were converted into parking garages and the value of the properties skyrocketed. By 1907 there were just 681 stables left, and 71 parking garages had been constructed. Twenty years later, all of the stables were gone, and 394 parking garages had given birth to the Parking Stall.
Death, Taxes, and Increased Parking Rates
In an annual ritual that has become as predictable if not as joyous as a New Year’s Eve countdown to midnight, Chicago drivers again will have to dig a little deeper to pay to park at meters in 2013.
- Chicago Tribune, 12/27/2012
It’s been said that there has been a parking shortage since the day that vehicles were invented. Today there are 254.4 million vehicles registered in the United States and vehicle sales have enjoyed double digit growth in the last few years. In fact, most of these vehicles operate in heavily populated cities where there is scarce amount of parking. Combine this with the fact that it took our country 237 years to reach the current population of 315 million people, but will only take 37 years to nearly double that figure, and you have a formula for unsustainable parking demand.
Supply and demand would dictate that more land would simply be converted to parking to help fill the gap, but beware of the invisible hand. The free market intervention of government agencies disrupts supply and demand and helps create artificial imbalances. In most cities, government agencies block the construction of new parking facilities while overwhelmingly supporting the conversion of existing lots and garages.
Salt Lake City Council bans demolishing buildings to create parking lots.
-Salt Lake Tribune, 11/27/2012
There are very few expansion options available in crowded cities, and as parking lots and garages are taken off-line for construction of high rises, availability of spaces dwindles. This is bad news for consumers, but as parking investors this represents the shining moment of opportunity.
An application has been filed to raze the eight-story parking garage at 75 Howard Street and build a 284-foot building with 160 condos in its place.
-San Francisco Business Times, 12/14/2012
To put it into a simple formula:
Exponential Population Growth + More Vehicles = More Parking Demand - Available Parking Spaces = Increase in Rates + Increase in Value of Parking Business
It’s What We Do
At JNL Parking we will help you find a profitable parking business, help you get top dollar for your existing parking business, or offer consultation services for your existing operations. We help hedge funds, REITS, and private capital groups acquire strategic parking assets to help their businesses expand.
Unconventional Parking Investing
We can also help investors with as little as $10,000 or investors who wish to diversify their parking portfolio by introducing them to a Parking Investment Fund that invests in parking lots and garages. Parking assets can be expensive and require experience to operate; this option gives investors the opportunity to get invested without the operational risk and capital limitations. If you are interested, click here to be contacted directly.
This would be a deal in any of our major markets. But once again, parking is limited no matter where you live.
Hong Kong Parking Costs $HK387,000 as Cash Moves From Homes
Investors reacting to the Hong Kong government’s campaign to curb home buying in the world’s most expensive market are shifting money into parking spaces, pushing up prices that in high-end neighborhoods can match the cost of two U.S. homes.
The average price of a previously owned parking spot in residential complexes rose 6.7 percent to HK$640,000 ($82,600) in the third quarter, the second highest on record, from the prior three months, according to Centaline Property Agency Ltd. A space in the exclusive Repulse Bay area sold in May for HK$3 million ($387,000), the most for a single transaction and more than double the median U.S. home price, according to CarparkHK.com, a website that tallies parking-spot information.
Hong Kong Chief Executive Leung Chun-ying has unveiled three major sets of curbs on home buying since taking over in July, amid concerns that continued U.S. stimulus would attract more funds into the city and fuel an asset bubble. Apartment prices in the city doubled in almost four years, driven by near record-low interest rates and an influx of money from China.
“There’s just too much liquidity in the market,” said Simon Lo, Hong Kong-based executive director of research and advisory at property broker Colliers International. “The government has set up a firewall for residential properties, but all this money still needs to find a place.”
Spaces TransferableHome prices gained 4.4 percent in the third quarter, according to Centaline, the city’s biggest closely held realtor by market share. Hong Kong is the priciest place to buy a home, according to broker Savills Plc (SVS), which compared prices in 10 cities, including New York and London.
Most parking spaces in Hong Kong, including those inside residential complexes, are freely transferable with separate ownership titles from the apartments, according to Hong Kong City Parking, which operates 10 parking garages in the city. Even so, some garages have rules prohibiting nonresidents from entering and parking on the premises, which lowers the leasing options available to the owners, said City Parking Chief Executive Officer Josh Wong.
Spaces in industrial and commercial buildings also are transferable, though landlords at most prime-office and shopping locations normally hold on to parking spaces to benefit from the stable rental returns they provide, said Wong.
“The circumstances are providing a perfect combination for a bubble in parking spaces,” he said. “There are demand-supply imbalances in some districts and the banks are pushing for the mortgage business.”
‘Less Resilient’Hong Kong banks normally lend a maximum 50 percent of a parking space’s value, compared with 70 percent for residential properties, according to Kenneth Tsin, head of property loans at Bank of East Asia Ltd. (23) Parking-space mortgages are riskier for banks compared with residential- and commercial-property mortgages, Tsin said.
“They are relatively less marketable than flats and shops, while their values are also less resilient than those of housing prices,” he said.
Developers often sell the spaces independently from the residential units. Cheung Kong (Holdings) Ltd. sold 514 parking spaces at its Festival City project in the city’s north on Nov. 24 for HK$980,000 to HK$1.3 million, said Roy Choi, a regional sales director at Centaline.
While realtors post listings of parking spaces for sale and charge fees on deals, few brokers specialize in them because the margin is too small, said City Parking’s Wong. Most buyers go to websites such as CarparkHK.com or ParkingHK.com, which partners with Hong Kong City Parking, for information.
Jerry Yeung, a 28-year-old stock broker, bought a parking space in a residential complex near the Olympic subway station, about a 10-minute train ride north of the Central business district, for HK$1.02 million earlier this month, just a week after the government announced its latest home-buying curbs.
Easier Investment“All these measures make buying apartments so much riskier,” said Yeung, who plans to lease the space for HK$3,000 a month. “Parking spaces are a much easier and simpler investment, plus you don’t need too much capital. If things in the apartment market don’t change, I’ll probably stick with this for a while.”
A parking space at Lohas Park, a middle- to low-end residential project in the city’s northeast, sold for HK$910,000, Centaline said Nov. 4. The space is being leased for HK$3,300 a month, equating to a yield of about 4.4 percent.
By contrast, a 900-square-foot apartment in the same project is being sold for HK$5.18 million, according to Centaline. With a monthly rental of HK$15,000, the yield is around 3.5 percent.
Falling YieldThe record for average parking-spot prices is HK$660,000, set in the fourth quarter of 1997, just before the city’s last major real estate crash.
The HK$3 million paid for the parking space in Repulse Bay, a residential district that’s home to some of the city’s richest people, including billionaire Cheng Yu-tung, is the highest on record, according to data compiled by CarparkHK.com, which also sells advertisement space for auto-related products.
Average yield for a parking space has fallen to as low as 4 percent in some districts from more than 5 percent two years ago and may decline to around 3 percent next year “if the frenzy persists,” said City Parking’s Wong.
Hong Kong, with 7.1 million people and a vast public- transport network, including subways, buses, ferries and trains, has one of the lowest car ownership rates among developed countries, with 56 cars per 1,000 people, according to World Bank statistics in 2011. That compares to 439 in the U.S. and 101 in Singapore.
Luxury CarsThose that do drive tend to do so in luxury: high-end cars such as Rolls-Royces, Bentleys and Mercedes-Benz accounted for 47 percent of total private-car sales in Hong Kong during the first 10 months of this year, according to figures compiled by industry analyst IHS Automotive.
In space-starved Hong Kong, the government charges a minimum first-time purchase registration tax of 40 percent of the value of a private car, and a minimum HK$3,929 annual license fee.
After Leung, a former property surveyor, imposed a 15 percent tax on non-local and corporate homebuyers and raised a resale tax on Oct. 26, 68 parking spaces changed hands in the next seven days, rising to 207 spaces in the week ending Nov. 16, compared with 33 recorded in the week before the announcement, according to figures compiled by CarparkHK.com. That’s the most transactions in a week since the website began collecting such data in February 2011.
‘Another Push’“We have already seen investment going from properties to parking ever since” the government first imposed an extra tax on property transactions in 2010, said City Parking’s Wong. “The latest set of measures just gave it another push.”
The government won’t rule out introducing measures to prevent a bubble from forming in the nonresidential market, Financial Secretary John Tsang wrote on his blog on Nov. 4.
There were more than 8,300 parking space transactions in Hong Kong in the first 10 months of this year, accounting for 8.9 percent of all property deals, real estate broker Midland Holdings Ltd. (1200) said. That percentage is the highest since records were first kept in 1997.
‘Negative Correlation’“The numbers suggest there’s a negative correlation between parking spaces and homes,” said Buggle Lau, chief analyst at Midland. “The taxes have driven investors away from buying apartments.”
Borrowing costs in Hong Kong are almost at record lows because the Hong Kong dollar’s peg to the U.S. currency ties monetary policy to the Federal Reserve’s even as the economy is driven by China’s growth. The city’s biggest lenders such as HSBC Holdings Plc and Standard Chartered Plc charge an average 2.15 percent on home loans, below the city’s inflation rate of 3.8 percent.
“At this interest rate nobody wants to leave their money in the bank,” said Wong Leung-sing, an associate director of research at Centaline. “When you try and stop people from investing in homes they have to find something else. Shops and offices are probably too expensive for most retail investors. Car spaces are the best alternative for them.”
By Kelvin Wong and Stephanie Tong
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