Buying a car park space: what to know

Why buy a car park space?

If you work in a CBD location, owning a car park space can be a way of ensuring that you always have a secure parking spot available for the workday commute. It can also be a way of enjoying the convenience and security of off-street parking if you live in a neighbourhood with limited street parking, or if your home is an apartment that doesn’t come with parking.

A car park space can also be an investment in its own right; one that has the potential to deliver healthy cash flow and very little maintenance.

How much do car park spaces sell for?

Car park spaces can be found listed for sale on commercial property sites, private online classifieds or on dedicated websites like Findacarpark. Just like homes, prices are based on size and location. As a guide, single car spots on the fringe of the Sydney CBD can be advertised from about $40,000, while others in the heart of the city centre may be listed for almost 10 times that amount. Making the news most recently, a car spot in the CBD sold for $500,000.

Ongoing costs of a car park space

If you’re thinking of buying a car park space, it’s important to understand the ongoing costs you’ll be expected to pay. These can include strata levies (as you do when owning a unit) and council rates. By way of example, a car space in Sydney’s eastern suburbs, which sold for $225,000, was advertised as having strata levies of $209.60 per quarter, and council rates of $188.90 per quarter. It could also be a good idea to find out if there are any tax implications, and you might want to consider seeking advice from a suitably qualified professional.

Can a car park space be a good investment?

As with all property investments, how much you can earn as an investor will vary widely. A 13 sq m car park space in Melbourne CBD listed for sale for $33,000, for instance, was described by Commercial Real Estate as having the potential to be leased for $300 a month. That could work out to a return of about 11% before ongoing costs. However, it’s worth stressing that this is one example. You really need to crunch the numbers for any car park space you’re thinking of buying. As with any piece of real estate, research the area to be confident it’s in a high-demand location.

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The ongoing impact of COVID-19 on car park spaces

City workforce and resident populations were increasing before COVID-19, which supported demand for car spaces. They delivered healthy cash flows with low outgoing expenses for owners. However, the Coronavirus pandemic changed many things.

One of the lasting impacts of the pandemic has been the locations where we work. City centres have always been employment hubs, and research by the Australian Institute of Family Studies found 67% of employed Australians are sometimes or always working from home, compared with 42% pre-COVID. The change in the way we work, and where we work may be here to stay. This change in our habits may have longer term impacts on where we choose to invest in car park spots.

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