Traffic Restrictions in ‘Madrid Central’ Drive up Parking Space Prices

16 March 2019 – El País

The Town Hall of Madrid, led by Manuela Carmena, introduced new traffic restrictions in the city centre (Madrid Central) in November last year on a provisional basis. As of Saturday 16 March, fines are now being levied on vehicles that enter the area illegally.

Only those vehicles owned by people who own or lease a parking space within the designated area may access the area, regardless of the environmental label assigned to their vehicles, if they are not residents. As such, parking spaces are in demand and so their prices have soared in the last 4 months.

In fact, prices have risen by between 20% and 30% following the imposition of the traffic restrictions. For a parking space that used to cost €20,000, vendors are now asking €25,000, and for a space costing €40,000 previously, vendors are now asking between €45,000 and €48,000, according to Daniel Lucía, founder of the company ParkingYa!, created twenty years ago and which sells more than 250 parking spaces per year.

According to Pisos.com, the average price of a parking space in the Centro district is now €52,100. In the Spanish capital in general, the average price amounts to €21,300. Moreover, even though the prices of parking spaces rose by between 10% and 20% across Spain in 2018, they are still 30% cheaper than in the years before the real estate bubble, when parking spaces in Centro and Salamanca were sold for €90,000 or €100,000.

These assets generated stable returns of 6.2% across Spain in 2018, compared with 5.5% in 2017, according to Idealista. In Madrid, the yield was 3.4%, although that figure varied by district. Location is key, as that typically determines the ease with which a space can be leased. Parking spaces in the city centre are always less profitable (generating less than 4%) than those on the outskirts but they are safer investments as are rarely unoccupied.

Original story: El País (by Sandra López Letón)

Translation/Summary: Carmel Drake

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