Hong Kong
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In land-starved Hong Kong, a small, unassuming apartment far from the city center can eat up half your monthly salary. But there’s one sure-fire way to get a discount for intrepid renters. The idea is to select properties where murders or unnatural deaths have occurred.
This housing, often apartments in high-rise residential buildings in the city, is so feared among residents that anyone who wants to live there can negotiate deep discounts in one of the world’s most expensive real estate markets.
“The discounts can be huge, and many people who don’t care can rent these places below market prices,” said Ng Gun Lau, an investor so famous for owning dozens of these apartments that local media dubbed him the “King of Haunted Houses.”
Haunted house listings can be found on most real estate agent websites. These are the places where unnatural and untimely deaths have occurred, including the scenes of some of the city’s most gruesome murders.
Real estate listing website Spacious.hk has compiled a 92-page list dating back to 2006, with details of each fatal accident. In a city known for its densely packed high-rise housing, many accounts list the cause of death as a “fall from a height.”
Other real estate companies offer advice on how to identify creepy apartments, including checking death certificates and asking potential neighbors about the apartment’s history.
In a city heavily influenced by Buddhism and Taoism, living in an apartment with gruesome deaths often heightens the fear of bad luck.
Feng Shui master Andrew Kwan said people believe people who die tragically may never have closure. “Their hatred may remain. (Their spirits) may remain in the apartment,” he said.
The horror of the curse has created a unique market for bargain-hunting investors and tenants willing to try their luck.
Utpal Bhattacharya, a professor of finance at the Hong Kong University of Science and Technology who led a study on the phenomenon in 2019, said property prices drop by an average of 20% after being labeled haunted, and up to 34% if a murder occurs.
He told CNN that the ripple effect spreads to properties on the same floor, where their values often drop by 10%, and apartments in the same building can drop by 7%.
“Belief in feng shui is very strong among Chinese people, and about 94% of Hong Kong’s population is Chinese…This implies that most buyers have a strong aversion to haunted houses,” Bhattacharya said.
Hong Kong law does not require disclosure, but regulators require real estate agents to provide accurate information about deaths in response to inquiries.
These details are important because the circumstances of the death, from an accident to a malicious homicide, can determine the amount of your discount.
Ng, a veteran investor in his 70s, saw an opportunity in the wake of death. He scoops up so-called haunted houses from owners who want to sell them and rents them out at up to 30% below market value.
“Many people don’t actually have strong feelings about Hang Zaat. It all comes down to the extent of the discount,” he says.
Still, the prevailing vibe in the city is that it’s best to stay away, or at least be cautious.
That’s especially true of properties associated with some of the city’s most gruesome murders.
In 2014, British banker Rurik Jutting brutally murdered two Indonesian women and hid one of their bodies in a suitcase in his luxury apartment at J Residences in Hong Kong’s popular nightlife district, Wan Chai.
As the gruesome details of the murder came to light, the value of the one-bedroom apartment where it happened plummeted from $1.16 million to $770,000, and the $3,740 monthly rent was cut in half, Bloomberg reported at the time.
Another property in Tsuen Wan, a residential area in the New Territories, was sold for a loss of $142,000, 40% off its original price, according to local news reports. The unit was the scene of a murder for money by three men in 2016. The men murdered their friend and sealed his body in a cement board kept in the unit.
The property owner will almost certainly suffer a loss. It is very difficult to find a buyer for a home that is listed as haunted. One reason for this is that banks also tend to shy away.
Eric Pau, senior associate director at Hong Kong real estate giant RicaCorp Properties, told CNN that many banks view them as high-risk investments. “In most cases, you won’t be approved for a mortgage,” he says.
But others see it as an opportunity, he says. Ng’s strategy as an investor is to be selective about the types of “haunted houses” he buys.
Whenever possible, he avoids properties associated with gruesome murders and looks for places where fatal accidents occurred some time ago.
“Fortunately, some ‘haunted houses’ have been around for so long that people have forgotten what happened,” he says. “The important thing is not to make people feel sad or uncomfortable.”
But like any investment, there are risks, and Ng has had his share of eerie failures.
Once, a tenant broke the rental agreement just a few days after moving in. The tenant wouldn’t tell him the reason, so he consulted a neighbor.
“I heard from a neighbor that the resident’s 3-year-old son would open a very difficult book at night and read it intently,” Ng recalled being told.
“He thought his son was possessed,” he said.
