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‘Haunted’ flats a tough sell in Asia’s priciest real estate marketUnnatural deaths in HK can result in rental discounts of 10-20% and can be more than double that for sinister killings13 November 2014BloombergThere’s a grim phenomenon in Hong Kong’s real estate market: discounts of as much as 50 per cent for home-seekers willing to live in an apartment where a murder has occurred.Unnatural deaths typically result in rental discounts of 10 per cent to 20 per cent 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, Mr Po said.The rent for a Wan Chai district apartment where police found two women’s bodies on Nov 1 - HK$29,000 (S$4,823) 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$9 million to HK$6 million 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 such as 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.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 sq ft apartment, according to Midland. Hong Kong is the world’s most expensive city after London for multinational companies to base staff because of its real estate, according to property brokerage Savills Plc.C S Group, a Hong Kong property services firm, is auctioning a 550 sq ft “hung jaak” on Nov 18 with a starting price of HK$3.18 million (US$410,120), according to its website. An apartment of the same size in the same complex sold last month for almost 27 per cent more, or HK$4.33 million, according to data from Midland.
Superstition and geomancy beliefs run deep. Hong Kong people also shun sites close to cemeteries, hospitals and churches, which can be considered unlucky. Buildings typically omit the fourth floor because the number is a homonym for the Chinese word for death. Property developers rely on feng shui, which translates as “wind and water”, the Chinese practice of arranging the physical environment in harmony according to beliefs about energy and design.“For those growing up in Hong Kong, feng shui is hammered into your mind, even if you don’t believe or understand it,” said Ng Wai-pok, a former lecturer of feng shui at the University of Hong Kong. “A large part of it is psychological, but there is also the metaphysical.”
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