The Rising Value of Car Parks in Auckland: Prime Real Estate

Discover the increasing value of car parks in Auckland. Find out how these prime real estate spots are in high demand and becoming even more valuable due to the impending scarcity of parking in the city center.

Central Auckland's parking spaces are garnering attention for their increasing value. The Farmers car parking building on Hobson Street is putting up ten car parks for sale. Despite additional rates and body corporate costs, each car park generates a monthly rental income ranging from $228 to $280. Comparatively, a parking spot at Auckland Transport's Fanshawe Street car park costs $368 per month. These parking spaces are in high demand due to the impending scarcity of parking in the city center. Auckland Council's $306 million investment in cycling infrastructure will lead to the removal of many on-street car parks, making the available spots even more valuable.

The demand for parking in central Auckland is already outstripping the limited supply. The ongoing removal of car parks to make way for cycle lanes will only exacerbate this imbalance. The redevelopment of the seven-story Downtown Carpark, which currently leases 796 parks, will add to the shortage, leaving many searching for alternative parking options. As a result, investors are now considering car parks as potential long-term investments. With a monthly rate of $480, a $60,000 car park would provide a return on investment in less than 10 and a half years. Despite the pandemic reducing the number of people in the CBD, finding suitable car parks remains a challenge due to their limited availability.

As Auckland's borders reopen and people start returning to the CBD, the supply and demand dynamic for parking spaces is expected to worsen. Newer developments are being constructed with only a small number of car parks or without any at all. Although there is hope that the city's public transport infrastructure will meet the growing demand, practicality dictates that Aucklanders will still require car parks. This ongoing need adds value to car parks as a form of real estate investment.

The starting price for the Farmers car parks is lower than the previous year's sales within the complex, ranging from $82,750 to $72,500. It is also lower than the median sale price of a car park in Auckland between 2020 and 2021, according to CoreLogic data. In 2020, the median sale price was $80,000, and in 2021 it was $95,000 from 19 standalone sales.

As council initiatives and redevelopment projects contribute to the scarcity of parking spaces in Auckland's CBD, car parks emerge as a valuable investment. Even relatively expensive car parks, such as the covered car park listed for $210,000 on Commerce St, are seen as worthwhile investments due to the diminishing availability of spaces. The supply and demand imbalance for car parks is expected to intensify as more apartments and offices are built without sufficient parking. This situation presents a rare opportunity for astute real estate investors to capitalize on an underestimated form of real estate.

In conclusion, Central Auckland's parking spaces are becoming increasingly valuable due to the combination of high demand and limited supply. As the council's initiatives and redevelopment projects reduce the number of available parking spots, the value of car parks as a real estate investment continues to rise. With the anticipated scarcity, investors see these car parks as a lucrative opportunity. As Auckland's CBD repopulates, the demand for parking spaces is expected to further intensify. Ultimately, car parks offer a unique investment opportunity in an environment where their value is often underrated.