Recently, Cheung Kong Group (01113) has been actively selling parking spaces at reduced prices. The price reduction has been as high as 30%, and the rental return has reached 4%. Due to the high price reduction and attractive returns, although the number of parking spaces each time it is launched is not large, it is very good. It sold out quickly and the sales are quite good. Compared with the mortgage for purchasing a house, fewer people know the information about the mortgage for purchasing a parking space. The author will explain it to readers.
After all, compared with some parking spaces where the return is less than 2%, Cheung Kong’s parking spaces after price reduction are much more cost-effective.
Can provide up to 60% mortgage
And from an investment perspective, parking spaces do not need to be decorated, there is no fear of rent tyrants, tenant mobility is high, management costs are much lower than residential buildings, and admission fees are cheaper than residential buildings. It has always been an investment choice for Hong Kong people. In 2021, three parking spaces on the top of the mountain were sold for more than 10 million yuan each. In July this year, the Hong Kong Monetary Authority announced that it would relax the upper limit of mortgage loan-to-value ratios. Parking spaces are also one of the projects that will benefit, with mortgages of up to 60% allowed. If the applicant owns a housing estate property and the newly purchased parking space is in the same housing estate, he or she can apply for a mortgage of up to 70% and repay the loan in 30 years without the need to comply with the agreement. Seeing this, readers may not understand why a mortgage of 60% can be obtained at one time and 70% at another time?
The reason is that the parking spaces themselves can be divided into independent parking spaces and contracted parking spaces. The so-called independent parking space, as the name suggests, is a parking space that can be sold independently. Since the parking space is not deeded to the residential property, the owner of the parking space can sell the parking space directly in the future without the need for strata. The mortgage term for an independent parking space is generally only 15 years at most, which can result in a 60% mortgage. Since independent parking spaces cannot purchase mortgage insurance from the Mortgage Securities Company, they cannot obtain a higher-value mortgage. As for contracted parking spaces, they refer to parking spaces purchased in conjunction with residential properties. They can be mortgaged at up to 90%, and the repayment period can also be 30 years, which is 15 years longer than independent parking spaces. As mentioned above, under the new policy, if you purchase a parking space in the same housing estate, you can get a 70% mortgage and repay it in 30 years without the need for a contract. In fact, it is equivalent to the owner of the housing estate purchasing a parking space in the same housing estate in the form of an independent parking space. However, you can get a higher-percentage mortgage and enjoy a longer repayment period.
Compared with the past when owners sold their parking spaces, they had to pay additional strata fees, which is indeed much more convenient.
Not all banks provide parking space mortgages
However, it should be noted that if the owner has other mortgages, the maximum mortgage ratio when purchasing a parking space will be reduced by 10%. For example, Mr. Chen (pseudonym) has an unfinished residential property and wants to buy an independent parking space in another housing estate. The upper limit of the mortgage ratio will be reduced from 60% to 50%. In addition, not all banks will provide car mortgages. If you are interested in purchasing a parking space, remember to inquire with your bank or mortgage referral company in advance.