Parking lot prices soar in Hong Kong due to an increase of tax imposed on properties.
The HK government has recent announced a new tax of 15% that is imposed on buyers of properties that are not HK residents. This new tax made a lot of investors find new sources of investments that can replace properties.
The catch is that parking lots are an exception to this new law and they are exempt from the stamp duty, as well as, when investors decide to re-sell them.
The massive investment made on parking lots across the SAR has pushed prices up by over 100% these past few months and we are now experiencing a bubble on the sector. According to a real estate agent, most of the buyers are investors, who are looking to purchase a parking lot and rent it out, gaining over 5% profit a year in rents.
Analysts warn that the investment may be risky because once the economy crashes, the first thing people will do is sell their cars, thus, decreasing the demand for parking lots.