The golden egg: An inner-city car space

Joan purchased a terrace house in Sydney in the 1980s. A career woman, she needed her car to commute to work and visit clients. Although her terrace does not include parking, the fact that a parking permit is needed on her street has increased the value of her property.

According to a Sydney Morning Herald article, Driven out: cars lose their lustre for a new crop of inner-city residents, 84 per cent of inner-city residents now commute by public transport. At the same time, Australia’s love affair with cars continues unabated: over a million new cars were sold in 2012. Many of those commuters may travel to work on public transportation, but their cars are still waiting for them at home or they wish they had a place to park a car.

The golden egg

Inner-city parking has become such a problem, anyone with available parking has the potential to lay a “golden egg” in the form of someone else’s car on their property. Joan can’t sell her parking permit, but if she decides to sell, the availability of residents’ parking permits in her area will add significantly to the value of her property. How significantly? According to the SMH article cited above, parking in an apartment complex can add up to $150,000 to the cost of an inner-city apartment.

As a rule, the more densely populated an area is, the harder parking is to find. Since the law of supply and demand is what drives prices up or down, it follows that inner-city parking will always be more valuable than suburban parking.

Yesterday’s suburbs are today’s inner-cities

As our metropolitan areas grow, this trend is going to continue. If you’re buying a house or apartment, you may not be willing or able to pay an extra $100,000 or more for the privilege of a parking spot, but just a few kilometres away, you might need to pay only a fraction more for a parking space. If the extra cost stretches your budget, consider doing as others are doing: sell your car and rent out your parking space.

Whatever you do, factor parking into your decision when looking for inner-city or near inner-city property. Check out the property market reports for the areas you’re interested in first and then look at them in person. If parking is scarce and the area seems undervalued compared to its neighbours nearer the inner-city, start looking for a property with a parking “nest” for that golden egg.