The guide to investing in car parking spaces

Investing in car spaces feature

Could a parking space be the lucrative property investment opportunity you’ve been looking for?

A concrete slab of maybe a dozen square metres might not sound like an attractive investment property, but it’s becoming an option increasingly worth considering for Australian investors. In busy capital cities like Sydney, Melbourne and Brisbane, convenient car parking spaces are at an absolute premium and some people are willing to pay a substantial amount of money to rent out a parking space close to where they work or live.

To take advantage of this situation, some savvy investors have started purchasing inner-city parking spaces as investments, renting them out to motorists to earn income and also looking forward to potential capital gains.

Rates last updated November 16th, 2018
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Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Monthly Service Fee Application Fee Product Description Monthly Repayment
Citi Personal Loan Plus
From 8.99% (variable)
9.96%
$5,000
3 to 5 years
$10
$199
You'll receive a variable rate between 8.99% p.a. and 17.99% p.a. (9.96% p.a. to 18.91% p.a. comparison rate) based on your risk profile
A credit limit up to $75,000 that you can continue to draw down over terms up to 5 years.
Harmoney Unsecured Personal Loan
From 6.99% (fixed)
7.69%
$5,000
3 to 5 years
$0
$500 (Upfront fee)
You'll receive a fixed rate between 6.99% p.a. and 26.95% p.a. based on your risk profile.
Apply for a loan up to $70,000 and repay your loan over 3 or 5 years terms.
ANZ Fixed Rate Personal Loan
12.45% (fixed)
13.32%
$5,000
1 to 7 years
$10
$150
You'll receive a fixed rate of 12.45% p.a.
Apply for up to $50,000 to use for a variety of purposes without needing to add security. Available to self-employed applicants.
RateSetter Unsecured Personal Loan - 3yr Fixed
From 8.95% (fixed)
9.55%
$2,001
0.5 to 5 years
$0
$89
You'll receive a fixed rate from 8.95% p.a. based on your risk profile
A flexible loan with amounts from $2,001 and terms starting from 6 months. Interest and comparison rates calculated for a loan term of 3 years.
HSBC Personal Loan
From 8.5% (fixed)
9.06%
$5,000
1 to 5 years
$5
$150
You'll receive a fixed rate between 8.5% p.a. and 16.99% p.a. based on your risk profile
An unsecured personal loan with a tailored, fixed rate where you can make additional and early repayments without penalty.
Latitude Personal Loan (Unsecured)
From 13.99% (fixed)
15.19%
$3,000
2 to 7 years
$13
$250 (Loans under $4000 - $140)
You'll receive a fixed rate between 13.99% p.a. and 29.99% p.a. based on your risk profile
Apply for what you need from $3,000 and use it for a range of purposes. Flexible repayments options.
NAB Personal Loan Unsecured Fixed
Headline rate 13.49% (fixed)
14.36%
$5,000
1 to 7 years
$10
$150
You'll receive a fixed rate between 11.49% p.a. and 18.99% p.a. based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes and pay off over up to 7 years.
Westpac Unsecured Personal Loan
12.99% (fixed)
14.14%
$4,000
1 to 7 years
$12
$0
You'll receive a fixed rate of 12.99% p.a.
Benefit from the security of a fixed rate with the flexibility of additional repayments. Existing Westpac customers may qualify for discounts. Note: $250 establishment fee waived if you apply before 20 December 2018.
Latitude Low Rate Personal Loan (Unsecured)
10.99% (fixed)
12.21%
$20,000
2 to 7 years
$13
$250
You'll receive a fixed rate of 10.99% p.a.
A secured or unsecured loan available to homeowners with a large minimum borrowing amount of $20,000. Benefit from flexible repayments and fast approval.
Pepper Money Unsecured Fixed Rate Personal Loan
From 9.99% (fixed)
9.99%
$5,000
1 to 7 years
$0
$0
You'll receive a fixed rate between 9.99% p.a. and 27.99% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no monthly or application fees.
NOW FINANCE Personal Loans
From 8.95% (fixed)
10.56%
$5,000
1.5 to 7 years
$13
$495 (Based on $10,000)
You'll receive a fixed rate between 8.95% p.a. and 16.95% p.a. based on your risk profile
Apply for loans from $5,000 and get a dedicated loan manager. No security required.
St.George Unsecured Personal Loan - Fixed Rate
From 12.99% (fixed)
14.06%
$2,000
1 to 5 years
$12
$0
You'll receive a fixed rate between 12.99% p.a. and 19.99% p.a. based on your risk profile
A low minimum borrowing amount of $2,000 to fund a range of purposes. Note: $195 establishment fee waived if you apply before 20 December 2018.
ING Personal Loan
8.99% (fixed)
9.13%
$5,000
2 to 5 years
$0
$100
You'll receive a fixed rate of 8.99% p.a.
Benefit from no ongoing fees, no early repayment fees and flexible loan terms on amounts up to $30,000.
Australian Military Bank Fixed Rate Personal Loan
From 7.93% (fixed)
8.77%
$1,000
1 to 5 years
$10
from $100 to $500
You'll receive a fixed rate between 7.93% p.a. and 18.87% p.a. based on your risk profile
An unsecured loan with a low minimum borrowing amount and flexible repayment options.
RACQ Bank Unsecured Personal Loan
12.95% (variable)
13.25%
$3,000
5 years
$0
$200
You'll receive a variable rate of 12.95% p.a.
A low minimum borrowing amount of $3,000 that you can use for a range of purposes. Benefit from member discounts and flexible repayments. Only available to QLD residents
CUA Unsecured Fixed Rate Personal Loan
11.99% (fixed)
11.99%
$5,000
1 to 7 years
$0
$0
You'll receive a fixed rate of 11.99% p.a.
An unsecured loan from $5,000 with no monthly or establishment fees and flexible repayments.
CUA Discount Fixed Personal Loan (Loans over $30,000)
10.99% (fixed)
10.99%
$30,000
1 to 7 years
$0
$0
You'll receive a discounted fixed rate of 10.99% p.a.
Receive a discounted rate for borrowing over $30,000 and benefit from features such as no monthly fees and flexible repayments.
ANZ Variable Rate Personal Loan
15.99% (variable)
16.84%
$5,000
1 to 7 years
$10
$150
You'll receive a variable rate of 15.99% p.a.
A flexible loan with amounts starting $5,000 that offers flexible repayments and a redraw facility.
NAB Personal Loan Unsecured Variable Rate
Headline rate 12.69% (variable)
13.56%
$5,000
1 to 7 years
$10
$150
You'll receive a variable rate based on your risk profile. The headline rate is 12.69% p.a.
An unsecured loan up to $55,000 you can use for a range of purposes. Benefit from fee-free additional repayments and a redraw facility.
CUA Unsecured Variable Personal Loan
11.89% (variable)
11.89%
$5,000
1 to 7 years
$0
$0
You'll receive a variable rate of 11.89% p.a.
Borrow from $5,000 with the option for flexible repayments and no monthly fees.
CUA Discount Variable Personal Loan (Loans over $30,000)
10.89% (variable)
10.89%
$30,000
1 to 7 years
$0
$0
You'll receive a discounted variable rate of 10.89% p.a.
Borrow over $30,000 and receive a discounted interest rate. No monthly fees and a redraw facility also available.
Pepper Money Unsecured Variable Personal Loan
From 9.99% (variable)
9.99%
$5,000
1 to 7 years
$0
$0
You'll receive a variable rate between 9.99% p.a. and 27.99% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Make extra repayments and repay early at any time.
Australian Military Bank Variable Rate Personal Loan
From 7.88% (variable)
8.72%
$1,000
1 to 7 years
$10
from $100 to $500
You'll receive a variable rate between 7.88% p.a. and 18.82% p.a. based on your risk profile
An unsecured loan with flexible repayment options and a low minimum borrowing amount.

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In fact, in early 2016, one Sydney investor made headlines when he listed a CBD car space for sale for $400,000 – money that would be more than enough to buy a house in some parts of Australia.

Why invest in car spaces?

Supply and demand is a crucial factor that affects the worth of any investment. In Australia’s major capital cities, the demand for car parking outstrips supply. This is especially the case in Sydney and Melbourne, where city councils are restricting the number of parking spaces available in an effort to reduce traffic congestion, and car lanes are being replaced by bicycle lanes. At the same time, the development of multi-storey city car parks is becoming a thing of the past.

So while more people are living and working in our capital cities than ever before, they have fewer and fewer spaces to park their vehicles. According to data from Colliers International and Parking & Traffic Consultants, the Sydney and Melbourne CBDs have the lowest ratios of car spaces to workers at 12.2 and 14.2 car spaces per 100 workers respectively.

Lacking car spaces graphic

The Sydney CBD also has one of the world’s highest median daily parking rates at $70.85 a day, while Brisbane ($69.03) and Melbourne ($63.61) are not much better.

With this in mind, it’s easy to see why car spaces represent an alternative investment opportunity. Many of them are strata-titled and for sale in busy CBD locations, as well as close to busy precincts such as airports and sporting grounds.

Not only do they have the potential to generate a surprisingly large rental income, but with an ever-decreasing number of car parks set to become available in future years, they could easily become highly sought-after pieces of real estate.

They’re also a relatively hands-off investment – once you have a suitable “tenant” in place you can just set and forget – unlike residential property, which requires ongoing management by you or a property agent.

Where are car parks in demand?

To get a clearer picture of the potential rental returns on offer from parking spaces in Australia’s capital cities, we searched the rental listings on Parkhound. The results of our search are shown in the table below:

State Suburb (postcode) Listings available Monthly rent
NSW Sydney (2000) 101 $187-$770
Victoria Melbourne (3000) 294 $181-$1,099
Queensland Brisbane (4000) 77 $165-$953

As you can imagine, prices vary widely depending on the type of space and where it is located in each suburb. Ease of access to the site also has an influence on the monthly rent charged.

For example, while a secure, undercover park on Essex St, The Rocks is listed for $572 a month, a secure underground park in Surry Hills is available for $360.

Buying a car space

If you like the potential returns a car space has to offer as an investment, the next thing to look at is how much a space costs to purchase. A quick search on findacarpark.com.au shows seven car spaces for sale in Sydney, ranging from $39,000 in Camperdown to $400,000 for a two-car space on the CBD’s Bond St. In Melbourne, prices for the 27 spaces listed range from $12,000 for a spot in St Kilda to $57,500 for an underground park on Exhibition St.

However, as a general guide, $40,000 to $60,000 should get you a space in the CBD of many Australian capital cities. Data from findacarpark.com.au in 2014 reveals that the average cost of a car space in Melbourne is just over $50,000, with an average rental yield of 8%.

Buying a car park is undoubtedly one of the cheapest ways to buy property in a capital city, which means some investors may have the capital needed to purchase a space outright. If you need to borrow funds, however, some lenders classify car parks as specialised property. This means the lender sees them as posing a higher level of risk, so the LVR may be as low as 50% and you may also need to contend with a higher interest rate.

If you do need a loan to purchase a car parking space, speak to your mortgage broker to find out what finance options are available.

Where to find spaces

Commercial Real Estate lists car spaces for sale across Australia and at the time of writing had 38 listings. findacarpark.com.au also allows you to browse spaces for sale and for lease; all you have to do is enter your desired suburb or postcode and start searching.

Some real estate agents also specialise in listing and selling parking spaces, so make Google your friend if you’re looking for a suitable car park investment.

Risks to consider

Before you decide whether buying a parking space is right for you, remember that there are risks involved. For one thing, there’s always a chance that a new development is constructed near your space and parking becomes more readily available. There’s also a risk that you may not see the capital growth you had hoped for, so buying as close as possible to the CBD is the best bet to maximise returns.

Before you buy, make sure you’re fully aware of all the costs associated with managing the space. For example, you may need to pay rates to the local council or, depending on where the spot is located, strata fees. These can quickly add up and negate any return on your investment.

Finally, it’s also worth pointing out that parking space levies and congestion charges apply in both Sydney and Melbourne. Sydney’s parking space levy applies to any residential and non-residential off-street space used or reserved for a motor vehicle. It’s $2,350 in the City of Sydney, North Sydney and Milsons Point, but drops to $840 in Bondi Junction, Chatswood, Parramatta and St Leonards. Down in Melbourne, the congestion levy is set at $1,360 for category 1 areas (including the CBD) and $960 for category 2 areas.

As governments around the country continue to search for new sources of funding, there is a risk that these levies may rise, or the areas to which they apply may expand.

Tips and tricks

  • Listing your space. Once you have a parking space, you can list it on websites like Parking Australia and Parkhound, which allow drivers to search thousands of parking spaces for lease across Australia. Parkhound, for example, has more than 8,900 members who have earned a total of $5,105,874 from renting out their car space. It’s free to list your space for rent on the Parkhound website.
  • Before you buy. If you’re buying an apartment with a parking space attached and you’re contemplating renting or selling the space at a later date, make sure you do your research first. The space could be on the same title or a separate title, while the owners’ corporation rules may stipulate that it can only be rented or sold to residents of the same building.
  • Limited capital growth. One other issue to be aware of is that while car spaces do provide the potential to generate good cash flow, they don’t offer the same potential for capital growth as some other investments. While house prices in capital cities can experience boom periods of substantial growth, the same can’t really be said for parking spots. After all, demand for housing is likely always going to outstrip demand for parking.

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Rates last updated November 16th, 2018
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.89%
4.24%
$0
$0 p.a.
80%
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3.99%
3.99%
$0
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80%
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
3.99%
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80%
A competitive variable rate home loan with no application fee.
3.84%
3.91%
$0
$0 p.a.
80%
Get instant online approval and flexible repayment options with this fixed rate mortgage for investing.
3.79%
3.82%
$0
$0 p.a.
80%
An essentials variable investor mortgage with a high borrowing amount so you can fund a large purchase.
4.08%
4.13%
$600
$0 p.a.
90%
Fund your investment purchase and offset up to $15,000. Available with a 10% deposit.
3.99%
3.99%
$0
$0 p.a.
70%
Investors with a 30% deposit can get this low rate loan to fund their property portfolio. Take advantage of split and redraw facilities.
3.74%
3.79%
$499
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80%
Competitive variable investor mortgage to fund your property portfolio. You can add a 100% offset account for just $10 a month.
3.93%
3.94%
$0
$0 p.a.
80%
This investment loan keeps fees low, has a sharp interest rate and comes with a 100% offset account.
3.99%
5.35%
$600
$0 p.a.
90%
Competitive rates for fixed for 3 years with redraw facility.
4.03%
3.92%
$499
$0 p.a.
80%
A competitive 3 year investor rate with principal and interest repayments. Optional offset account with a $10 monthly fee.
4.05%
4.22%
$0
$10 monthly ($120 p.a.)
90%
Lock in your interest rate on your investment property for 2 years. For a limited time you can earn double Velocity Frequent Flyer Points.
3.91%
3.92%
$0
$0 p.a.
80%
Investors can go from application to approval in as little as 20 minutes with this innovative online lender.
4.43%
4.28%
$600
$0 p.a.
90%
An interest only investor mortgage that lets you offset up to $15,000. Available with a 10% deposit.
3.98%
3.98%
$0
$0 p.a.
70%
Investors can get a 100% offset account and a low rate if they have a big deposit. 100% online application process.
4.09%
4.87%
$0
$395 p.a.
90%
Buy your investment property and set your repayments for the first year. Available in QLD, NSW and ACT only.
4.24%
4.00%
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80%
Buy an investment property and enjoy the certainty of a 3-year fixed rate with interest-only payments.
4.09%
4.40%
$0
$0 p.a.
70%
Forget about rate rises for two years and minimise your investment repayments with this interest only mortgage. Requires a 30% deposit.
4.54%
4.59%
$600
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80%
An investment loan for new Heritage Bank customers. Low fees and interest-only repayments.
3.97%
3.99%
$0
$0 p.a.
80%
Package your owner occupied loan with investment loan and receive a discounted investment rate. 100% offset account included.
4.29%
5.33%
$0
$395 p.a.
90%
Lock in a competitive investment rate and combine your loan with a credit card and transaction account for extra savings. Package fee applies.
3.99%
4.62%
$395
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80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
4.29%
4.31%
$0
$0 p.a.
80%
Investors will pay no application or ongoing fees for this interest-only loan.
4.18%
4.18%
$0
$0 p.a.
80%
Investors get a 100% offset account and pay no application or ongoing fees on this loan from an innovative online lender.
4.14%
3.96%
$0
$0 p.a.
80%
Investors can go from application to full approval in as little as 20 minutes with this innovative online lender.
4.13%
4.14%
$0
$0 p.a.
90%
Access a fee-free offset account and a special interest rate for investors.
4.29%
4.31%
$0
$0 p.a.
80%
A simple, variable rate investor loan from an online lender that keeps fees to a minimum.
3.99%
4.62%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
4.90%
4.31%
$0
$0 p.a.
80%
Lock in a fixed rate for 5 years and make interest-only payments with this investment loan.
4.24%
4.68%
$0
$0 p.a.
90%
Fix your investment repayments for 1 year. You can get this loan with a 10% deposit. Available in QLD, NSW and ACT only.
4.18%
4.19%
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80%
Investors can easily access their equity using BPAY, a debit Master Card or cheque book with this interest-only line of credit.
4.31%
3.95%
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80%
A variable interest-only loan for investors. Fast application, low fees, optional offset account. 100% online lender.
4.64%
5.39%
$0
$395 p.a.
90%
Pay off your investment knowing your exact repayments for the first 4 years. Get this loan with a 10% deposit.
4.29%
4.27%
$0
$198 p.a.
70%
Fund your property portfolio with this fixed rate mortgage which includes a 100% offset account. 30% deposit required.
3.94%
3.92%
$0
$0 p.a.
80%
Lock in your interest rate for 2 years and enjoy flexibility, an optional offset account and a fast online application process.

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2 Responses

  1. Default Gravatar
    JulieJune 20, 2018

    I’m looking at investing in buying car parking spaces in Melbourne what do I have to do or go to to find out places where in Melbourne and how much And is it worth it
    Thank you cheers I don’t want to rent them want to buy them
    Cheers

    • finder Customer Care
      JeniJune 21, 2018Staff

      Hi Julie,

      Thank you for getting in touch with finder.

      If you need to know where to buy car parking space in Melbourne, you may check online by going to some pages like findacarpark.com.au or contact a real estate company around Melbourne to scout places that sell parking spaces.

      As per this page, $40,000 to $60,000 should get you a space in the CBD of many Australian capital cities. Data from findacarpark.com.au in 2014 reveals that the average cost of a car space in Melbourne is just over $50,000, with an average rental yield of 8%.

      You may also want to read more on parking locations and fees in Melbourne on this page.

      I hope this helps. Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

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