This is a perennial buyer question and one that is quite difficult to answer.
It depends on the expectations of the buyers, which is affected by the location, price, availability of on street parking and proximity to amenity including public transport.
Few people are expecting off street parking for a tiny period house next to Windsor Station at $1.1m.
Everyone is expecting off street parking for a period house in Finch Street, Glen Iris at $5m.
Two identical 1970s two-bedroom apartments, one with a car space and one without, may sell for $660,000 and $600,000 respectively. So, ostensibly one could say that a car space for this type of property is worth around $60,000, or 10% of the value.
But once you start talking about period homes in the inner city it gets more complicated.
The higher the price, the more buyers will expect parking as a non-negotiable.
Even if they don’t plan on using the parking – perhaps it’s at the rear taking up the entire courtyard and is only accessed down a narrow laneway – it is still important for resale.
Rear access is also handy if you’re doing a large renovation or extension, as it can be challenging and costly to bring all the materials through the front of the property. I’ve even seen examples of a crane being needed to hoist beams over the roof of a terrace house as there was no right-of-way at the rear.
Not many people are willing to pour $1,500,000 into a renovation on a home without parking, as the risk of over capitalising increases with value.
For these reasons, two identical single fronted houses in Prahran, one with a car space and one without, may sell for $2,100,000 and $1,800,000 respectively. In this instance a car space could be worth as much as $300,000 or roughly 17% of the value.
Of course, every house and every sale has its own unique set of characteristics and circumstances so it’s impossible to come up with a formula.
We have sold houses without parking for $4,000,000. But that is very rare.
The only thing for sure is that off street parking is desirable for all and non-negotiable for some and therefore draws a significant premium.
It will be very interesting to see what happens as electric vehicles become more mainstream.
There is already a growing contingent of buyers who need their Tesla to sleep next to a power point, further increasing demand for off street parking in Stonnington.
Feature Image: 4 Chatsworth Road, Prahran
David Sciola 