Sheryl Purdy in her downtown Calgary parking lot where her rates have increased dramatically.TODD KOROL
As giant chunks of hail bounced off Sheryl Purdy's car, the Calgary stock broker briefly considered upgrading to an indoor parking spot.
Her daydream didn't last long. She already pays $400 monthly for a space a block from her downtown office, a relative bargain in Canada's priciest parking market.
"I could park further away and reduce the price," she said. "But I'd probably have frostbite by the time I got to work in the winter. And in the dark, early mornings, it's just not safe. So, I pay it and bite my tongue."
The price of parking has consistently increased each year, as downtown developers pave over parking lots to build condo paradises. A shortage of spots, a lack of new supply and insatiable demand have all contributed to steady price gains in an often forgotten corner of commercial real estate.
In the past 10 years, the price of a Calgary spot has increased by 233 per cent, according to Colliers International. Toronto prices have gone up 130 per cent.
"There is no purer form of economics than those found in the parking lot," said Julian Jones, senior vice-president at Vancouver-based Impark, which operates lots across North America. "It is completely market driven, and it is not easy to adjust quickly to demand fluctuations."
The median price for a monthly unreserved spot in downtown Calgary is $453, Colliers said yesterday in its 10th annual international parking survey. That's $117 more than Toronto, which comes in second at $336.
Canada's parking story is all about supply and demand - dozens of downtown lots from coast to coast have been torn up and redeveloped into condominiums over the past five years, and it's not easy to find new spots once they vanish.
On a daily basis, Toronto is more expensive at $23, compared with Calgary's $22. The city has lost several downtown lots in the past two years as developers rush to erect new buildings on attractive sites, said BuzzBuzzHome Corp. president Matthew Slutsky, including the new Trump Tower and the Festival Tower, which will be the new home of the Toronto International Film Festival.
"Parking lots provide land developers with a piece of land with no rental-tenant commitments and no buildings to demolish," he said. "At the same time, there is an excellent income opportunity on the site while they work on zoning and planning issues."
Parking lots are commercial real estate, but they are also largely recession-resistant because of long waiting lists built up in better times.
"The reason prices keep going up really comes down to limited supply," said Wayne Duong, director of research with Colliers International in Canada. "There's a reason Donald Trump doesn't build parking lots - they think it makes more sense to build condos and office buildings."
There are waiting lists in eight out of the 12 markets surveyed - and only 10 new garages to be developed in the next two years. Given those dynamics, prices aren't likely to get any lower. For downtown workers who need their cars to get in from the suburbs or attend meetings through the day, there's little choice but to pay.
"I am actually very grateful to have a spot that I can have on a monthly basis," Ms. Purdy said. "Many people don't have one. I just don't enjoy paying, but I do anyway for the luxury of having a parking space."
Canadian parking prices pale in comparison with other global centres. London's city centre is the most expensive in the world at $933 (U.S.) a month, with its West End coming in second at $874. Hong Kong ($745), Tokyo ($654) and Zurich ($605) rounded out the Top 5.
In North America, Midtown Manhattan was the most expensive, at $538, while downtown spots in New York fetched $529. Calgary was the third most expensive, followed by Boston ($425) and San Francisco ($375).
"While many businesses and consumers are still acting prudently, demand for parking looks to be somewhat insensitive to price, allowing parking garage owners and operators to hold rates steady even in the face of economic hardship for many," said Ross Moore, Colliers' chief economist.