HK’s red-hot property market exorcises ‘haunted’ apartment phobias

PETALING JAYA (July 1): Hong Kong’s red-hot property market has driven away fears of hongza – “haunted” apartments where tragic deaths took place – as buyers seek cheaper deals amid escalating prices and punishing taxation meant to curb price growth, reported Reuters.

More buyers are taking a stab at these properties despite powerful superstitions over the lingering spirits of those who were killed or had completed suicides as homes increasingly grow out of reach beyond the average Hong Konger.

Ng Goon-lau, a former sharks fin seller and property flipper dubbed by local press as the “King of Haunted Flats” for having bought and sold two dozen of these properties since the 90s for a profit, has observed that the gap between the prices of these haunted homes and average market values have narrowed over the years – to about 10% from some 30% from 2013.

He noted that fierce competition over homes have driven buyers to look at cheaper and more practical alternatives such as hongza.

Indeed, the government had received over 80,000 applications for 576 units of “haunted” flats.

For context, the average waiting time for public housing is five years, thanks to limited supply and high demand.

In June, property consultancy Knight Frank said only 20% of Hong Kong’s 1.85 million taxpayers can afford to buy a medium-priced apartment with a price tag of HK$8 million (RM4.12 million), and prices of these homes are expected to only rise further this year – by 8% to 17%, five property analysts told Reuters.

The changing attitudes towards these flats have also encouraged banks to finance their purchases; while most banks would have rejected mortgage loan applications for such properties a decade ago over concerns that these properties would be difficult to dispose of in the event of a default, banks now think otherwise as demand grows for these properties.

While appetite for hongza grow, Ng has no plans to divest of his assets, describing them as “’pearls and treasures”.