Space to park a car might seem expensive to prospective buyers, but a property without it is likely to be harder to rent out and harder to sell.
The joys of parking
Car parking is a hot topic, one that is raised with me by prospective purchasers a lot more frequently these days.
The community is becoming ever more environmentally conscious and, with greater use of public transport in inner urban areas being encouraged, having a secure place to leave the car is becoming increasingly important to prospective purchasers – owner-occupiers and investors alike.
And they are right to focus on parking. To buy a residential investment, typically an inner urban apartment or a small cottage, without parking can have serious negative consequences.
Space to park a car is becoming more expensive, but it adds huge flexibility, and will contribute to overall higher investment performance. Increasingly, planning authorities are allowing the development of one-bedroom apartments without car parking in an inner-urban areas near public transport and other amenities.
Some owner occupiers and investors are prepared to buy such apartments without car parking, but be warned: they can face greater delays in leasing, having to accept disproportionately lower rents, reduced capital gain over a longer period, and reduced saleability in the future.
And prospective buyers should think carefully before buying apartments that had been serviced apartments; they might not be suitable to normal residential use. Some planning permits specify that a lower than usual car parking ratio is a concession only available to serviced apartments or hotel developments, and that such properties cannot transfer to normal use in the event of business cessation.
Conventional established housing, such as inner-urban cottages, perform differently in the market according to the availability of car parking; capital growth is better for those with parking, so do rental values. Tenants prefer, and will pay more for, places with parking spaces, rather than facing the inconvenience and risk of vandalism that goes with having to park their cars in the street.
My recommendation, therefore, is don’t underestimate the importance of car parking, even though it comes at an ever increasing price. In the longer term, you are far better to have it as part of any residential investment rather than being placated or persuaded by vested interests that in the inner urban area car parking is no longer relevant.
Private dependency on car use will continue at least for another decade and in all probability, residential investments that do not have parking spaces will probably take at least another decade to become generally acceptable and par for the course.
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James Grant at charterdrive.com.au writes: Is car sharing not a solution? I am a member of a car sharing company where I rent cars by the hour and they have Smarts to Mercedes Benz in their fleet.