Agent Will

With ever greater frequency developers are not providing parking spaces to the lower end suites in new buildings. Take 1212 Howe, as the latest example. The Jr. One bed suites had no chance of getting a parking space. Or look at getting even some higher end buildings, ones where you are paying over a cool million and are allocated only one space. Seems pretty ridiculous to some. Now know that an extra parking space, if available, can easily run as much as $50,000 downtown.

$50,000! To put your car away at night.

It hasn’t always been this way. Spaces used to go for around $5000 just seven years ago. Yes, the best real estate investment appears to have been parking spaces. One at 212 Davie sold for $15,000 in 2002. Today? It would be a lot more.

People love their parking spaces, for sure. Nothing boosts the value greater than extra parking spaces. Forget kitchens, bathrooms, granite, stainless steel, or hardwood floors. Pavement or concrete behind secured gates is where it’s at.

But really… what is the value of parking? Let’s break it down like nobody seems to have done before.

Let’s say that an extra spot in a new development (or maybe your only spot) is a reasonable $35,000. Financed over 25 years at the best rate seen to date (3.95% variable) this space costs you about $183 per month. I would bet that you could find a space available in the building from someone not using theirs for far less. Additionally if you had the $35,000 in cash sitting around you could certainly park it into some investment vehicle (pun intended) getting anywhere from 6-10% yield so that 35k will turn into anywhere from $150k-350k in 25 years.

With parking spaces having skyrocketed in value over the past few years and with gas prices on the rise and more looking to get out of their cars and into more cost effective means of transportation (Zip Cars are there when you need them) I really wonder about the future value of a parking space (or more than one space).

Where the value is likely to be seen more than anywhere else is on resale. Suites with parking spaces in the building (not off-site as is often the case with some heritage buildings) are more desirable than those without resulting in quicker sales.

Still… if you live in the city, work in the city, and play in the city then why do you need a car? When I lived in the West End we rarely got in the car for anything other than business. It was all walking and bike riding for us. Course, I only paid $45/month for my space as a rental so I didn’t mind so much.