Buying a “Home Sweet Home” is a dream that many Hong Kong people share. It is a common financial goal that gives first-time buyer the sense of pride, achievement and security. As property prices continue to soar high, you might find it increasingly difficult to possess your own sweet home. If you are one of the potential buyers, don’t despair. One possible bargain option is available in the secondary market, which has higher rental return and a lower purchase price at 70 – 80% of its market value – Haunted House.
What is Haunted House?
The so-called “Haunted House”, known as “Hong Za (凶宅)” in Cantonese, generally refers to stigmatized property that has been the site of unusual happenings including murders, suicides or accidental deaths in jumping fatality. In some situations, some units in the same floor of a homicide unit are also labeled as haunted. For example in the Telford Gardens murder case where 5 women were poisoned to death, the units on the same floor were considered among haunted in the real estate and bank industries. Even though the murder occurred in only one of the units, the property value of other units were also dragged down.
Other than deaths by homicide or suicide, deaths by nature cause might be haunt-related too. In the case of a death by nature cause like illness or old age, the associated properties are usually not classified as haunted, but some media have coined such units as “Semi-haunted House”. Most of the times, foul smells were reported in these units due to the death of elderly living alone. With massive media coverage, these units are often listed in haunted house database, which in turn affect the property value.
According to feng shui, haunted house does not necessarily mean the property has a ghost or “Spirit Friendly”, but rather a place with bad feng shui or inhabitants’ negative energy in which one can improve. This means making a haunted house into a dream home is possible; it really all depends on whether you have the guts to live in it.
Is Haunted House Worth the Investment?
Although the price of a haunted house is generally lower than the normal neighbours in the market, the house price or rental value for some haunted houses have gone higher in recent years due to property prices’ surge. Some of these haunted houses had generated substantial investment return, consequently making the idea of owning a haunted house not so daunting. Here are a few successful stories:
- Five murders were carried out at the Telford Gardens in 1998 where many people believed there were supernatural events happening, so for years there were lack of interest in the units of the same floor. As rents continue to rise in past years, one of the units have attracted a foreigner who rented the place recently. It is across the unit where the murders had happened, and was purchased by the owner this year at a “special offer” price of HKD $2.78 million in cash, which is 30% off the market value. With a 5% rental return, it is leased to the foreigner tenant at HKD $12,000 per month that is 20% off the market’s rental value.
- A charcoal-burning suicide had happened in a unit of Tin Chung Court at Tin Shui Wai where the unit was purchased recently by a Mainland buyer at HKD $1.75 million, approximately HKD $2,636 a square foot and 20% off the market value. The previous owner had bought this unit in December 2010 at HKD $1.20 million. After deduction of stamp duty and other legal expenses, the original owner has gained approximately HKD $430,000 over two years.
- A suicide by jumping occurred in Mei Foo Sun Chuen where the unit was sold recently at HKD $5.27 million, which is 15% off the market value. The previous owner has purchased the unit in 1999 at HKD $2.37 million and gained an investment return of HKD $2.96 million.
How do you know if you are buying haunted house?
- According to the Estate Agents Ordinance, estate agents are not required to disclose information about a property being regarded as haunted. Furthermore, the ordinance does not have any regulatory guides on haunted house selling or disclosure. This means whether stigmatizing events are being notified, there is no legal recourse for buyers to seek redress or compensation if problems arise after acquisition. It is the buyer’s sole responsibility in finding out whether a property is associated with any misfortunate events.
- There is no legal definition of a “haunted house” and different persons may have different interpretations of it. This means you should be specific in your enquiries with the real estate agent. You should simply ask whether a suicide or homicide took place in the unit before, and not use vague terms, such as whether the unit had strange or haunted events. Remember if you have not made direct enquiries with your agent or if the agent does not know or could not have known that such stigmatizing events ever happened in the property of your interest, the agent has not breached the Code of Ethics.
- From a legal point of view, there is no encumbrance created by murders or accidental deaths on property. For this reason, if a buyer backs out of a haunted house purchase, the seller has the right to forfeit the buyer’s deposit.
- Standard banks generally kept a list of haunted house. These banks often refuse to give buyers a mortgage loan, and offer a property valuation much lower than the market value. If you decide to buy a haunted house or suspect that your house is haunted, you should seek property valuation and mortgages from various banks.
- The Hong Kong Land Registry does not provide information on haunted house or problematic properties. The public can only inquire the Land Registry for properties associated with series criminal or murder events. To find out properties that had less fortunate incidents, you can refer to our website’s Squarefoot Haunted House database.
Recurring Misfortunes. Rare Coincident?
According to Squarefoot’s Haunted House database, two or more unfortunate incidents have happened in some haunted houses. For example, two consecutive suicides occurred in Kwai Shing West Estate at Kwai Chung where a loving husband jumped off the building and fell on the same spot as his wife’s jumping fatality a year ago.
Another example is the burning deaths in Richland Gardens at Sheung Shui’s Hang Tau Tsuen where a lady was burnt to death 16 years ago. This lady actually climbed to the rooftop after the fire broke out but villagers couldn’t find a long ladder to rescue her. While she hesitated to jump off the three-storey building, a second explosion occurred and killed her. After 16 years of her death, another suicide occurred in the same unit where a female was found dead next to burned charcoal.
With a history of multiple deaths, you might find the above units very creepy and possess an eerie atmosphere. However, feng shui can help or cure a haunted house by keeping out the unwanted guests. You can read more about this from our Haunted House Feng Shui article under Squarefoot – The Space section.