Wed, Jan 11, 2012 - Page 5 News List

FEATURE: HK buyers see past ghosts, gobble up ‘haunted houses’

AFP, HONG KONG

Apartment buildings are pictured in Hong Kong on Sunday.

Photo: AFP

It might not be everyone’s idea of a dream home, but for bargain hunters in Hong Kong’s turbocharged property market, apartments that belonged to the recently deceased are proving irresistible — and the more gruesome the occupant’s demise the better.

Popular belief in a city awash with superstition runs that the ghost of a person who dies in unnatural circumstances — a suicide, murder or bad accident — inhabits their home, passing misfortune onto the new occupants.

The threat carries weight in a city where feng shui consultants do brisk business, families placate the “hungry ghosts” of their ancestors with offerings and people even refrain from whistling in the street in fear of disturbing lurking spooks. By law, buyers are entitled to details on so-called “haunted houses” — or hongza in Cantonese — and many rigorously check the backstory to their potential purchase.

However, not everyone is afraid of ghosts, and in the cut and thrust of Hong Kong’s runaway property market some investors are actively following the tragedies, aware that dark incidents push the price down.

Discounts of between 20 percent and 40 percent are the standard for haunted houses with a knock-on for the rental yield, said Eric Wong of the squarefoot.com.hk property Web site, which has a channel dedicated to the phenomenon.

“Hong Kong people are sensitive to ghosts and bad luck,” he said. “They believe in feng shui — if something bad has happened in a home people won’t take it ... but Hong Kong is small and very expensive, so if a good discount comes there are others ready to make the investment.”

And for the savvy buyer there are plenty to choose from.

Among the hundreds of macabre listings on the squarefoot.com.hk Web site is the home of a local soccer player who, crushed by the weight of debt and relationship problems, jumped from his 36th floor flat.

Then there is the divorcee whose body was discovered a month after she poisoned herself with the fumes of burning charcoal or the woman hacked to death and mutilated by her domestic helper in an exclusive apartment block.

Such morbid tales are a boon to investors who would not live in a haunted house themselves, but will gladly put it up for rent.

“There’s a group of investors who bid for these places specifically and then rent it to people who don’t mind its bad history,” Wong added.

More often than not those are foreign expatriates — widely known in local slang as gweilo — who are not overly concerned about the history of their apartment.

“Gweilos don’t have the same beliefs as Hong Kong people and just want a cheaper price in a nice area,” said Winnie Ng of Rich Harvest property agency.

Haunted houses might be sold for 40 percent below market price depending on what has happened there and how recently it took place, Ng said, equaling the impact of the 2003 SARS outbreak that had investors fleeing the city.

Also, while the market is slowing, properties remain expensive, narrowing the pool available to prospective buyers.

A deposit on an entry-level unit is more than three times a typical first-time buyer’s gross household income, Barclays Capital Research said in a recent report.

Home prices have leaped more than 70 percent since 2009, while banks have increased mortgage rates five times since March last year, pricing all but the wealthiest out of the market.

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