With private passenger cars restricted in Discovery Bay, an upscale residential development in Hong Kong, and golf cart licenses limited to 500, golf carts now cost more than a Tesla or Porsche. The supply crunch has transformed Textron and Yamaha vehicles into luxury transportation.
Golf carts are the hottest buy in Discovery Bay, a residential development in Hong Kong, with prices topping those of a Tesla Model S and Porsche’s Boxster sports cars, Bloomberg reported.
The buggies can sell for more than HK$2 million ($255,000) in the upscale neighborhood that’s home to airline pilots, bankers and lawyers. Business executives drive them, expatriates love them and nannies ferry kids to school in them. Private passenger cars aren’t allowed in this neighborhood, and the Transport Department has capped golf-cart licenses at about 500. The supply crunch has transformed these slow gas-guzzlers into luxury transportation. Some buyers view them as investments—renting them out or reselling to make money, Bloomberg reported.
“You have HK$2 million, better buy a golf buggy rather than put it in the bank,” said Bill Chan, a director at real-estate agency Century 21 Newcourt Realty in Discovery Bay.
See a video documenting the trend below:
In Discovery Bay, buyers are essentially paying for the licenses, which can only be owned by residents who also own property. They can be freely traded between individual owners. That leads to prices typically associated with luxury wheels—the kinds that include windows, air conditioning and a trunk, Bloomberg reported.
Golf carts attract buyers partly because of the punishing cost of real-estate investments in Hong Kong: There isn’t much you can buy in the property market if you have HK$2 million to spare. Private homes in Discovery Bay currently sell from about HK$8 million ($1 million) to HK$80 million ($10 million), said Denis Ma, head of research for Hong Kong at real-estate services company Jones Lang LaSalle Ltd.
The area’s developer, Hong Kong Resort Co., said it explored various options before deciding that golf carts would be the best fit for Discovery Bay’s positioning as a town with the environment of a resort. In recent years, it’s introduced electric golf carts. Only holders of valid driving licenses are allowed to take the carts on the roads, Bloomberg reported.
Katie Jepson, one of the owners of real-estate seller Headland Homes, said she’s seen cart sales increase during the last few years after the government introduced higher stamp duties, a type of property tax intended to cool the real-estate market. “If they’ve got an extra HK$2.5 million, instead of buying a small apartment you have to pay stamp duty on, people have been buying some golf carts,” Jepson said. Carts can earn monthly rents of HK$8,000 to HK$10,000, she estimated.
Even so, there’s risk in pouring money into a vehicle built primarily for a round of golf. The golf carts are far from a necessity, and there’s no guarantee prices will stay high because residents have alternatives like biking or internal shuttle buses, said David Ji, head of research & consultancy for Greater China at real-estate research firm Knight Frank. “People trying to bet on this going on forever strikes me as risky,” Ji said. “At the end of the day, you speculate on a house and the house price drops, you still have a house.”
Manufactured by companies including U.S.-based Textron Inc. and Japan’s Yamaha Motor Co., the golf carts so far remain an unshakable staple of life in Discovery Bay, which has a population of about 20,000, Bloomberg reported.
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