Will Garages be Worth More Than a Bedroom One Day?
Anyone whom has read “The Effortless Empire” By Chris Gray will know that we only purchase investment properties with at least one off-street car space.
A covered car space is a little bit better, secured area more desirable but the cherry on the top is a lock up garage in a secured area with internal access to the building if purchasing in a block of units.
Long term I think that parking spaces will become even more sort after and hence more valuable. One of the key drivers for this is the number of passenger vehicles in Australia.
This is not as important if you are buying in the outer suburbs away from the coast and CBD where leafy lined streets have ample of car spaces and houses have double garages.
As we get closer to the CBD and the beaches, parking nightmare begin. Not only do we have an increasing population, but also the number of passenger vehicles is increasing at an alarming rate considering the push to get people onto public transport. Further complicating this issue is the ever-increasing cost of local council parking permits and increased restrictions.
A census in January of 2013 shows that there are 13 million passenger vehicles in Australia. That means between the census of 2008 and now we have over 10% more vehicles on the road fighting for the same parking spaces.
What is important to note here is that in the areas that we focus on buying investments in, which are typically those that would be difficult to increase the number of dwellings, the demand for parking space is increasing faster than the increase in dwelling numbers. The figures below from the Australian Bureau of Statistics show that the numbers are still increasing every year:
2001 – 2005 = 10.8% (4 years)
2003 – 2008 = 13.9% (5 years)
2008 – 2013 = 10.1% (5 years)
In Bondi a 16sqm Garage was sold for $240,000. That equates to $15,000 per square meter, which is higher than the cost of most brand new apartments cost per square meter.
Records have also been set in Paddington for a garage fetching over $10,000 per square meter.
It is easy to see why parking will bring a premium to your investment. Not only will it increase the rent, but in the necessity of selling, will be much easier to market. Investors should really take serious consideration before buying a property without any parking.