Jawdropping Prices on Parking Spaces in Beijing

Parking spaces in a number of residential areas in big cities such as Beijing and Shanghai have recently seen sharp price surges. The average price per square meter is now more than 10 thousand yuan, with some parking spaces costing as much as 800 thousand yuan. What are the reasons behind such high prices?

Let's take a closer look with our reporter Liu Min.

Many high-end residential communities in Beijing have priced their underground parking spaces at more than 300 thousand yuan each. The highest price appears at the Xiagongfu Hotel Apartment, close to the Wangfujing commercial circle, valued at 800 thousand yuan. Manager of Beijing Property Agency Homelink, Zhang Yue, says parking spaces have become hot property among Beijing residents.

"Beijing has recently increased the costs of parking within the 4th ring road. Such a move caused a number of panic purchases from residents keen to secure residential parking spaces. People want to buy now to hedge against the surging price in the future. Many older communities didn't build enough parking spaces, and more and more people now own cars, both of which have led to higher prices. Furthermore, some people are also speculating in the hope of making profit at a later date."

Manager of 21st Century property agency, and industrial insider Lin Lei, says property developers usually have the final say when determining the current parking space prices in many cities.

"Usually, property developers increase the price of parking spaces by 10 percent based on the cost of construction. But the second and third time sales of such spaces usually pushes up the prices a lot. That is decided by the level of supply and demand in the market."

Many residents are currently protesting against a property developer's violation of selling parking spaces in a community near Beijing's Second Southern Ring Road. The local developer has auctioned more than 700 parking spaces, and gained about 70 million yuan out of the deals.

"The parking spaces were part of the properties we bought when we purchased the apartments. The developer is making profit by selling them again. We think this violates our rights."

Before 2007, when the Law of Property Rights was not in effect, if there was no clear indication as to who possessed the ownership of the community's parking spaces, then the spaces should belong to all residents in the community. When the law took effect in 2007, a clause in the law stated the opposite. Lawyer Chen Fei, from Beijing Renhe Law Firm, says the current law in China has confused many people.

"After construction is completed, some property developers would auction off public spaces, including the parking lots and community entertainment centers, in order to make money. Such a phenomenon is quite common in many cities across the country.

The only way to solve this problem is by relying on the government's administration, but as of yet they've done nothing in this area. Furthermore, the current law and regulation also contains many loopholes."

The high demand for parking spaces coupled with a shortage of supply will always be a phenomenon in metropolises like Beijing, while the question of how to protect people's rights still remains.

For CRI, I'm Liu Min.