The seventh month of the Lunar Calendar is the Chinese Yu Lan Festival (a.k.a. Hungry Ghost Festival). In traditional Chinese belief, encountering the departed would adversely affect one’s luck. That is why Chinese people tend to move away from haunted properties to avoid the possible encounters.
But with flat prices on an upward trend for more than a decade, the exclusive discounts enjoyed by haunted flats are starting to draw homebuyers priced out of the overheated market for long or bold investors who seek to “Buy Low, Sell High”.
There are about fifty cases registered in Squarefoot Haunted House Database between May and July this year. Kwai Chung tops the list with eight cases, followed by five cases each in Sha Tin and Kwun Tong, and four cases in Yuen Long.
Despite having the highest number of cases, that doesn’t mean Kwai Chung has the greatest potential for investment. Dozens of industrial buildings, inconvenient access to CBD, inactive transaction volume and weak rental demand make the haunted properties difficult to lease, let alone to sell. The yields on the flats are probably lower than average.
The Energizing Kowloon East Scheme is giving Kwun Tong a new facelift. Part of the project is to transform the area into another premier CBD of Hong Kong. Commercial upgrade is underway but it already drives up prices in this sub-market. Any haunted flats priced 20% below market rate are attractive with good rental yield or resale value.
Geographically located in the New Territories, Sha Tin is every bit as bustling as any other core districts in the city. The East Rail Line is scattered with universities, luring mainland university students and locals alike to scope out rental properties. Sha Tin also boasts a half-hour life circle, a big plus for quality living. The strong rental demand is a drive to generate enquires for its haunted properties.
Yuen Long will be abundant in new supply for the coming years. Sun Hung Kai Properties alone are rolling out more than 2,500 units in the fourth quarter pipeline. Whether the ample supply affects the rental return of properties is still not known, but it’s obvious that the West Rail line will find it more difficult to cope with the booming population, giving rise to traffic issues that may reduce investment value. Homebuyers also need to be aware that it would be extremely difficult to take out a loan from the old, haunted walk-ups.
When it comes to investing haunted apartments, the type of units counts a lot. From Squarefoot database, you will see quite a few cases happen in subsidized housing. This residential type is of little investment value, especially when the government is set to push out new batches of flat supply for the coming years
Before moving in a haunted place, some tenants or owner-occupiers somehow don’t feel it right and keep finding ways to get a peace of mind. A tip for the paranoid: try to demonstrate the ritual of“Worshipping the Corners” before moving in.