Homes with parking spaces generally attract a premium.
Buying a property in the inner city? Then an on-site car park is generally a must if you’re wanting to maximise value.
Andrew McCann, a director at Bennison Mackinnon Real Estate, says given it can be difficult to find a small house with on-site car parking in many inner suburbs such as South Melbourne, Prahran or South Yarra, ”those homes that offer it attract a premium”.
He says that while the amount of value an on-site car park adds to a house is difficult to quantify – houses with car parks tend to be on larger blocks, for example – the existence of a spot for the car can in some cases add 10 to 20 per cent to the value of a home.
”It may mean the difference of $100,000-$200,000 on a million-dollar sale,” he says. ”And that’s partly because it’s bringing in a much bigger pool of buyers … which creates more competition.”
Paul Osborne, founder of buyer’s advocacy Secret Agent, says research his company carried out relating to 32 suburbs within six kilometres of the CBD has revealed ”a clear correlation between an increase in price and whether an apartment or a house has car parking” as well as the amount of car spots a property has.
Drawing on a sample of 1373 houses and 990 apartments sold between April and December 2012, the research categorised the sales according to the number of on-site car parks.
It found that while the median price for a two-bedroom house with no car park was $710,500, the median price for a two-bedroom house with one car park was considerably higher at $767,000 and that for a two-bedroom house with two car parks higher still at $830,000. Prices generally rose in a similar pattern when it came to three-bedroom houses.
Looking at apartments, meanwhile, the data shows that while the median price for one-bedroom apartments with no or one car park was the same – $385,000 – when it came to apartments with more than one bedroom, prices also rose along with the number of car parks.
The figures also showed a correlation between the number of car spots and rises in median property prices when categorising the properties according to land sizes. Properties of between 101 and 200 square metres with two car parks, for example, had a higher median price than similar-sized properties with one or no car park.
Mr Osborne says while house prices are likely to increase as land sizes and house sizes rise, the research shows the number of car parks seems to be a factor in the climb in values.
Noting that while the exact amount of value a car park could add to a property remains ”tricky to ascertain” and differed from one suburb to the next, Mr Osborne says research does show car parks will generally add value to a property and are a good way to ”unlock instant value” if added to properties that didn’t previously have one.