Its All Supply and Demand
The big news over the holidays was the boom in parking space prices in land scarce Hong Kong. It makes sense, but of course its a tad out of control. Spaces are selling for upwards of $600,000 with prices being bid up across the board.
There is some ego involved in these situations with drivers of high end cars wanting to be near the elevator but in some cases, its a simple case of needing a place to put your car.
The laws of the marketplace are inviolate. As supply dwindles and demand goes up, prices increase. Like most of China, Hong Kong is a large city on a small foot print. Just a few decades ago, there was little automobile ownership in the area. Now with a rising middle class and the desire for the freedom brought by auto ownership, the auto population and the need for places to put it is on the rise.
We may be shocked by the numbers, but we shouldn’t be…Condo parking spaces in the US are selling for those kind of prices. When people have money and an apparent need, price seems to go out the window.