Toronto’s parking real estate market is small and expensive, with the Multiple Listings Service showing downtown spots for tens of thousands of dollars. It is a long way from New York, where a luxury condo-in-the-making will soon be putting a space on the market for $1-million, but there is a demand in Toronto for private, safe, sheltered parking.
MLS currently has 40 parking spots listed in Toronto, ranging from $5,800 near Lawrence Avenue to the $49,900 spot owned by Mr. Cheung. He bought the spot three years ago as an additional space for his daughter. But the spot has been vacant most of the time since she moved out.
“I really don’t want to rent it out. You can see the other conditions. People litter, they leave motor oil on the ground,” he says.
Mr. Cheung is expecting the space to eventually sell for around $45,000, but hasn’t received any official offers. Still, he does his best to talk up the particulars.
“It’s very close to the entrance, all entrances actually, when you drive down. As soon as you drive down the ramp, it’s right here,” he says. “This is bigger than a normal downtown spot.”
He is pitching to a relatively specific buyer.
“Units are easier to sell with a parking space attached,” explains Steve Deveaux, vice president of land development at Tribute Communities and board of directors manager at BILD Toronto.
Indeed, most condo buyers will look for one that includes parking, narrowing the market to those who didn’t or someone looking for space for a second vehicle.
But that doesn’t mean the demand isn’t high enough to push up asking prices. Mr. Deveaux says it is not uncommon to pay anywhere between $45,000 to $60,000 for a spot.
“Depending on where you are in the downtown determines where the real demand for parking is,” he says.
If you are along the Yonge-University-Spadina subway line, the demand to rent or buy is rather low and there is a mild jump in demand if the space is along a streetcar line.
“But a North-South downtown street with no immediate adjacent transit alternative, that’s where you’re going to have a higher demand,” says Mr. Deveaux. “It really is very geography specific.”
Even considering the hit-and-miss nature of the market, Mr. Deveaux says there are good reasons to consider selling a space — if the owner isn’t using their car anymore or if they simply want to cash in spaces they bought years earlier as an investment.
“We’re often, when making applications to the city, reducing the number of parking spaces,” he says. As population densities rise and units are placed on smaller and smaller plots of land, the demand will continue to rise. “They’re really becoming a commodity.”
But would Mr. Deveaux make the same choice himself?
“I would keep it and rent it out,” he admits.
That’s what Jennifer Castiglione, 27, is looking to do. She posted an ad on Kijiji.ca looking for a tenant, and asking $150 per month for use of her parking spot in the King and Dufferin area.
“I don’t have a car, I don’t need it, and I’m under the impression that someone may want it, will need it and will pay to use it,” she said.
Keeping the space and renting it out is worth more, she argues. Not only can she make an extra bit of money, keeping her ownership will increase the price of her condo substantially when she decides to move.
“In buying that place, you realize that parking space costs $40,000 to own it,” says Ms. Castiglione. “But if I don’t have a car, it’s kind of silly to consider [keeping it empty].”
John Poletes, a Toronto real estate lawyer, says owners don’t usually opt to sell.
“Statistically, I would say out of every thousand transactions, maybe four or five [are parking spaces]. There’s usually a short supply of them, so that’s why there’s a higher price.”
Downtown spaces can cost more than a vehicle to fill the spot. “I think the most recent price I’ve seen,” says Mr. Poletes, “is $54,000 at the corner of Yonge and Eglinton.”
For Robert Shusterman, the years of renting out his parking spots are numbered. The 50-year-old real estate agent owns a condo and a parking space on Grand Trunk Crescent, between the Rogers Centre and the Air Canada Centre. Three years ago, he picked up three additional spaces in his building’s parking garage. Now he is looking to sell them off.
“I think it’s a good investment, to buy a parking spot. I bought my spots, the three of them, three years ago, and I paid $25,000 for each,” says Mr. Shusterman. “Within a year and a half after that, I got an offer of $37,000.”
He didn’t take that offer, but now he has listed two spots for $41,000 and the third, which is a tighter fit, for $37,000.
“So, $25,000 increased to $37,000 over a year and a half. If you put that money in the bank, if you put $25,000 in the bank, it’s not going to be close to $37,000 in a year and a half. I got a 50% return in a year and a half. The banks can’t offer you anything close to that. That’s why I bought the spots.”
Mr. Shusterman’s spots have been listed since early this year, but he isn’t surprised by the lack of offers. His building requires that any space being sold go to someone else who lives in the building.
“Mine have been on the market for a long period of time. They’re hard to sell. The target buyer is very specific. You’re looking for a buyer who lives in the building,” says Mr. Shusterman. “Parking spaces can be on the market for sale in a condo building for a year or two, easily, before they’re sold.”
Most prospective buyers expect to get a deal on a spot, but when they see the prices and consider the economy, they are more likely to rent rather than buy.
“Unless they can get a deal on it for like $30,000, quite often they don’t want to buy,” admits Mr. Shusterman. But he is waiting for someone to come along who needs parking, but has purchased a unit without a spot.
The sale will pay off, and provide Mr. Shusterman with a hefty profit, but he understands it will likely take some time.
Mr. Deveaux, meanwhile, says many Toronto residents are moving away from their vehicles. His company put a condo up on University Avenue in 2009 that offered no parking whatsoever. He said 270 of the 318 units were sold within nine days.
“Nobody blinked an eye.”