For those of us still not brave – or rich – enough to invest millions in the fast-rising Dubai real estate market, here’s a cost-effective way of riding the crest of the wave.
Buy a parking space in one of the more sought-after residential towers in a free zone area.
For your information, an individual car parking space just sold for HK$1.3 million (Dh616,000) in Hong Kong, reports said on Monday, as investors seek new ways of making money amid sky-high property prices.
According to reports in the Post and The Standard dailies, Hong Kong tycoon Li Ka Shing’s flagship Cheung Kong Holdings made HK$600 million over the weekend after it sold 514 car park slots. Some of the slots, priced between HK$980,000 and HK$1.3 million and located in the New Territories bordering mainland China, were quickly resold for profits of up to HK$300,000 each, the reports said.
In Hong Kong, the parking lots reportedly can be rented out at HK$3,800 (Dh1,800) to HK$4,700 (Dh2,227) a month, fetching a yield of about 4 per cent.
Emirates 24|7 reported that landlords of Dubai apartments, those who own two or three parking spaces in mixed-use towers, are renting out their unoccupied parking space for anywhere between Dh5,000 and Dh7,000 per year.
This figure is shooting up, as many of our readers have pointed out, and there have been reports of some landlords renting out parking spaces in Dubai's Old Town/Downtown area for as much as Dh15,000 per month.
Renting out parking spaces separately from the apartment may not be rampant yet, but it is picking up as landlords look for additional ways of benefiting from a recovering property market. A slump in property prices and rental values over the past three years has seen landlords lose up to half of their earlier income.
Now, it seems that the same owners who felt shackled by a lackluster property market are out with a vengeance to recover lost money. Popular Dubai blogs and forums are full of tenants in some of Dubai’s most popular residential areas – the Greens, Views, Jumeirah Beach Residence and Dubai Marina – seeking additional parking for their cars.
Dubai has one of the world’s largest ratios of cars versus population, which seems to be the cause of this scarcity of car parking spaces. According to Dubai’s RTA statistics, 522,474 private vehicles for passenger transport were registered by the licensing agency in 2011, more than quarter of the emirate’s total 2011 population of approximately 2 million.