Rising vacancies across many CBD office markets have led Brisbane to record the most expensive parking rates in the country.
According to Ray White Head of Research, Vanessa Rader, with attitudes towards CBD parking having changed since Covid, along with work from home, rising fuel costs, and better public transport, demand to occupy parking spaces has fallen.
Ms Rader said based on daily maximum drive-up casual rates, Brisbane CBD has the highest prices.
“Although reducing by 3.4 per cent over the last year, the rate of $79.83/day now bypasses Sydney CBD, which has seen an 8.7 per cent fall in average prices to $77.67/day,” Ms Rader said.
“Despite this current high Brisbane rate, it could be under further occupancy pressures, with the Queensland State Government announcing 50 cent public transport costs starting in August, which will aid in the cost of living crisis and will generate ‘car-free’ activity back into the CBD.
“The gap between parking costs and near free public transport is likely too much to be passed up by regular commuters.”
Ms Rader said the Melbourne CBD parking market had seen the worst long-term growth of any other region.
“Over the last year, these daily rates have fallen slightly to $67.49, however, have recorded less than 0.5 per cent annual growth over the past 10 years, highlighting the difficulty in CBD office market with long-term high vacancies and a strong WFH movement also affecting the car parking sector,” she said.
“Discounting is also strongest across the Melbourne CBD with early bird rates attracting more than a 65 per cent discount, aimed at the office workforce, this is the highest in the country followed by Brisbane and Sydney.”
Away from the east coast markets, parking results have had different fortunes Ms Rader said.
“Despite office vacancies still high in markets such as Adelaide and Perth, average daily parking rates continue to grow,” she said.
“Adelaide recorded the most rapid escalation in costs, up 10.4 per cent over the last year to an average rate of $24.74/day.”
Ms Rader said this market also recorded some of the more limited discounting, with online rates attracting a 10.8 per cent reduction, while early bird was down 30.2 per cent on the casual rate.
“These discounts are indicative of differing attitudes towards public transport and a greater reliance on vehicle transport in the city centre,” she said.
“Similarly, Perth has seen growth over the last year, up 4.3 per cent to $35.77/day, and continues to offer substantial discounts for online and early bird bookings.
“In Canberra, there are limited parking discounts available and daily rates have only seen a small improvement to $20.07, Hobart similarly averaging $18.83/day.”
Ms Rader said overall transaction levels had been limited across the country over the past few years.
“Smaller strata title offerings continue to see good results as they are heavily owner-occupier driven, however, larger parking structure investment and the reduced returns will likely see values decline,” she said.
“Over the past year, we have seen assets come to market that fail to transact, however, one recent sale in Melbourne’s CBD has set a new benchmark with a price on a per bay basis of just over $30,000, a far cry from values achieved pre-pandemic.
“For many car park owners, freehold assets still offer long-term quality returns and future development potential hence remain tightly held, particularly as our CBDs change; while operators who offer EV charging, easy-to-use apps offering discounts, and easy access will be best rewarded with the best occupancy.”
