Sunday 15 December 2019

Superstitions run deep as companies seek homes for their Hong Kong staff

Buyers in Hong Kong are among the most superstitious in the world market
Buyers in Hong Kong are among the most superstitious in the world market

Michelle Yun

There's a grim phenomenon in Hong Kong's real estate market: discounts of as much as 50pc for home-seekers willing to live in an apartment where a murder has occurred.

Unnatural deaths typically result in rental discounts of 10pc to 20pc and can be more than double that for sinister killings, according to Sammy Po, head of the residential department of realtor Midland Holdings. Chinese believe such places, known as "hung jaak," the Cantonese term for "haunted apartments," are unlucky, he said.

"The Chinese really do care" about living in these places, Po said.

The rent for a Wan Chai district apartment where police found two women's bodies on Nov. 1, HK$29,000 (€2,950) a month at the time of the murders, will probably drop by half when it's released from being a crime scene, cleaned and rented again, according to a director of the company that owns the unit, who didn't want his name or firm identified because he isn't permitted to speak publicly. The sales value of the unit in the luxury J Residence would decline from HK$9m to HK$6m if it were sold immediately, the person said.

Hong Kong had almost 190 sites where an unnatural death took place, including murders and suicides, this year, according to a database compiled by Squarefoot.com.hk.

Squarefoot lists the date of the incident, the address, the district and a brief description of the death. Among recent listings were an apartment where an 18-year-old male student slipped a plastic bag over his head last month and jumped to his death; one where a middle-aged couple, plagued by financial troubles, committed suicide by inhaling burning coal smoke; and another where a mother was hacked to death by a mentally unstable neighbour while protecting her two daughters.

Hong Kong is certainly not the only place where home-seekers can be wary of a residence marred by tragedy. Nevertheless, in a comparably high-demand market like New York City, the stigma is less marked, according to Jonathan Miller, president of real estate appraiser Miller Samuel. in Manhattan. Where sales inventory in the city is scarce and rents are near records, a crime or other negative event wouldn't have much effect on price, he said.

In the UK, a particularly notorious crime can cause a home to become unsaleable, requiring it to be knocked down and rebuilt, said Richard Sexton, a director at e.surv, the country's largest provider of residential property valuations.

"Equally, if it's a folklore situation, the UK can be different," he said. "The house with the friendly ghosts can sometimes be marketed that way as a positive."

Hong Kong property agents aren't required by law to disclose if a death occurred in a unit, but they should provide information when asked under the industry's code of ethics, according to the Estate Agents Authority, a government agency. Potential tenants or buyers should ask whether a suicide or homicide took place because there's no legal definition of a "haunted property," the agency said in an e-mailed response.

Hong Kong is otherwise Asia's priciest real estate market. Private residential rents hit a record high in August, reaching almost HK$25 a square foot, or HK$12,500 for a 500-square-foot apartment, according to Midland. Residential sales prices, which have more than doubled since 2009, hit a record last month despite government measures to curb demand

The city is the world's most-expensive after London for multinational companies to base staff because of its real estate, according to property brokerage Savills.

C S Group, a Hong Kong property-services firm, is auctioning a 550-square-foot "hung jaak" on Nov. 18 with a starting price of HK$3.18m. An apartment of the same size in the same complex sold last month for almost 27pc more, or HK$4.33m, according to data from Midland.

"The demand is there, whether from investors seeking rent or for self use," said Alger Cheng, general manager of the group's auction department.

First-time homebuyers are also drawn to these cheaper properties, Po said.

Superstition and geomancy beliefs run deep. Hong Kong people also shun sites close to cemeteries, hospitals and churches, which can be "unlucky".

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