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RM50,000 for one (1) car park, would you pay?

To be very specific, 8 years ago, I paid RM10,500 for an additional car park when I bought my Penang condo. I told my brother-in-law and my brother to buy one. Both did not eventually as they felt RM10,500 was very expensive just for an additional car park. Over the years, the price for a car park has slowly risen from RM15,000 to RM20,000 followed by RM30,000, RM40,000 and today my friend, Ken Lim of penangpropertytalk.com told me that an affordable housing project in Penang is selling one (1) extra car park for RM50,000! He called the developer concerned and the final conclusion was that this extra car park was optional. Nevertheless, without the network of LRT or even a monorail, most homes would have two cars and thus the pinch.
Actually, I seriously believe that these car parks would become more expensive. When it was RM35,000 I showed my wife the calculation which shows that if we have that cash, it may be better off buying that car park than rent. After all, when you sell your home, an additional car park carries a premium of above RM40,000 most of the time. Calculation as follows:
Assuming rental of one car park is RM100 / month. This comes up to RM1,200 / year. To earn an interest of RM1,200 with an interest of 3.5%, one would need to deposit RM34,286 into the bank and not touch this amount for a very long time. Thus, an additional car park may be worth RM35,000 if the rental is RM100 per month. Of course for KLites who are reading this, you would be scratching your head. RM100 for rental per month? My area is already RM150 per month! When I was staying in Kelana Puteri, I paid RM160 for a covered car park for my wife to park. The rental in Penang is always lower, whether it is for an equivalent condo or apartment or even a car park.
RM50,000 meanwhile is in a totally different league altogether. This assumes that the car park rental would soon reach RM150 per month? I asked another friend who owns a condo unit in Straits Quay. She said it would cost RM70k for two additional car parks plus a small storage area. Another agent said the usual premium for an additional car park can be up to RM50,000. Perhaps we wait for the developer to clear the air soonest possible. According to penangpropertytalk.com, the latest update is that the additional car park is OPTIONAL. This is the project that we are talking about: 800sf CONDOMINIUM for just RM299,000 – Better be quick  
One car park is definitely not enough today. The decision would be a tough one to make if the RM50,000 price tag remains. I think majority would opt not to buy. When this happens, get ready for a lot of cars parked haphazardly just outside the condo. I am not sure if this is what the developer may want because this is Aspen’s maiden project and I am sure they would want to do a great job for their buyers. Perhaps any unsold car park can be rented out for a cheaper rate to the residents instead? This can be a source of income for the condo committee too.
written on 27 Jan 2015
Next suggested article: An Update of the RM299,000 condo in Penang. ‘Short cut’ offered.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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