Hong Kong's 'haunted' houses attract savvy investors

Feb 25, 2010, 6:23 GMT

Hong Kong - Not long ago, a person committed suicide in Hong Kong's smart Mid-levels residential district, jumping to their deaths from one of the high-rises.

Residents of the ground floor apartment on which the body landed were shocked and moved out. But the owner immediately found another tenant for the fine piece of real estate: a European who did not mind that a grisly suicide had taken place there. To superstitious locals, however, the apartment was 'hongza' - haunted, unlucky.

The term derives from the Chinese word 'xiong,' pronounced 'hong' in the Hong Kong dialect, which means 'calamity,' 'violence,' 'murder.' 'Za' means 'residence.'

Since attractive properties are ever harder to come by on Hong Kong's real estate market, savvy investors have started snapping up dwellings where people have met horrible deaths. A hongza can be a real bargain, with a purchase price 40 per cent lower than the city average.

But 'time heals all wounds,' noted property speculator and blogger Mo Yu-Wen, who invests in ill-fated properties. His advice to other hongza investors is to study the market carefully, buy and then wait for a rise in the property's value.

'If the owner of the hongza wants to rent it out, the rent must be at least 20 per cent lower than that of a comparable residence in which no unnatural death has occurred,' Mo wrote. 'As time goes on, though, fewer and fewer people will remember what happened and the value will go up again.'

Real estate agents in Hong Kong, a special administrative region of the People's Republic of China, have devised a macabre four- category rating scale for hongza properties.

Category 4, symbolized by four death's-heads, is the most extreme, for example the apartment where a young girl was brutally murdered and dismembered in July 2009. The crime left Hong Kong in a state of shock for months. A category-1 hongza, symbolized by one death's- head, is the scene of a fatal accident.

According to Hong Kong's real-estate blogger scene, all four categories are worth investing in, so long as the discount is big enough. The bloggers also point out that the targeted tenants or resale buyers are people who, unlike most Hong Kongers, tend not to believe in the spirits of the dead.

These people include Westerners like the renter of the Mid-levels apartment. Or Christians in general. Or medical professionals such as doctors and nurses, who, as Mo pointed out, are accustomed to death.