Parking value: What's a car space worth?
In Melbourne’s booming apartment market, car parks are a precious commodity.
Many new developments don’t include car parks for each apartment. For some people, that’s not an issue. It’s easy to live in the inner suburbs without a car since public transport and bike lanes make getting around easy. However, the majority of people still own a car, even if they don’t use it every day, and street parking isn’t always convenient.
For city-dwelling car owners, a car park that’s undercover, secure and close to their front door is the Holy Grail. Understandably, such a space can add real value to an apartment – tens of thousands of dollars, according to some estimates.
- In Melbourne, inner city car spaces sold separately to an apartment can go for up to $50,000.
- The REIV has said that apartments with car spaces in the CBD and on St Kilda Road have sold for up to $100,000 more than those without.
- A study by findacarpark.com.au showed that the average rental yield for a car park was 8 per cent, and the price of a car space had doubled in the last decade.
If you are looking for an apartment with a car park, there are some issues you should be aware of.
- A car park, like a balcony or a storage cage, can boost the size of the property – it is sometimes included in the overall apartment size, so double check if this is the case.
- Confirm if the car park is on the same title or a separate one. Whether it is or not can determine what you can do with the space.
If the car park is on the same title as the apartment, the two are a package – they can’t be sold separately. When they’re on separate titles, there is a possibility of selling the space, or even renting it out. If considering renting the space, carefully read the owner’s corporation rules to see what is and isn’t allowed. In some instances the space may only be rented or sold to others living in the same building (there may also be rules dictating that the space only be used to park the car, and not as additional storage).
Given that the number of people living and working in the city and inner suburbs now far outstrips the number of available spaces, a car park can be extremely valuable for a lucky apartment owner.