Car space adds more than $100,000 to apartment price

Author: Enzo Raimondo, CEO
Date: 22 May 15

There is a price difference of more than $100,000 between a one-bedroom central Melbourne apartment with a car parking space and one without.

REIV Chief Executive Officer, Enzo Raimondo, said the median price for a one-bedroom apartment without a car space in central Melbourne, including St Kilda Road, was $313,250 for the year ending March 31. That compared with $416,000 for an apartment with a space.

That $102,750 difference compared with a difference of $90,000 for the 12 months ending March 31 last year – a 14.2 per cent increase.

“It is clear buyers are prepared to pay a premium for car parking, despite the ready availability of public transport in central Melbourne,” Mr Raimondo said.

For two-bedroom apartments the price differential was slightly lower, at $93,000, however the year-on-year change for this segment has grown significantly, up by 37 per cent.

The median price of a two-bedroom apartment without a car space is $495,000, compared with a median of $588,000 for an apartment with one or more car spaces. While this year the difference is more than $90,000, last year the difference was only $68,000.

“This new REIV data also shows that both one and two-bedroom apartments with car parking space increased in value by around 4 per cent more than those without over the past 12 months,” he said.

Mr Raimondo added that in other parts of Melbourne there is a similarly high premium placed on car parks. This includes:
• Docklands, where there is a $121,000 difference in the median price of a one-bedroom apartment with car parking and one without; 
• In East Melbourne with a difference of $76,000; and 
• In West Melbourne, with a difference of $60,750.

In Melbourne, where the number of people working and living in the city is growing faster than the number of car spaces, inner-city car parks can sell for up to $90,000, he said.

But he warned that while some apartment buyers without cars hoped to rent out their car space or sell it, this may not be possible if it was on the same title as the apartment. Also, owners corporations may impose restrictions – for example, allowing spaces to be sold or let only to others in the building.