Hong Kong’s hongza: Investing in property where terrible things have happened
Recently someone jumped to his death from a high-rise in Hong Kong’s expensive Mid-levels (半山區) residential area. The person fell into the flower pots of the first floor apartment’s private terrace. The first floor tenants moved out in shock, but the owner found a westerner right away who didn’t mind at all renting the – apart from its chilling history – wonderful place.
The Cantonese word 凶hong stands for violence and murder; 宅za for residence.
As on the Hong Kong property market attractive objects become fewer and fewer, speculators have started investing in houses where grisly deaths have occurred.
The purchase of a hongza can be a very attractive option for buyers who are after a real bargain: prices are 40% lower than the average city price because the apartment had been the scene of a homicide.
“Time heals all wounds”, the blogging property speculator Mo Yo-Wan (莫育文) who invests in such property writes on his blog.
Hong Kong’s bloggers like Mo generally have the reputation of being real experts in their fields. When they write about hongza investment, they advise speculators to keep a close eye on market sentiments, buy, and then wait for value appreciation.
Mo explains: “If the owner of a hongza wants to rent the place out, the rent has to be at least 20% lower than that of a comparable house where no unnatural death occurred. But after some time has passed, and fewer and fewer people remember what happened, the value will go up again.”
The Hong Kong real estate market has developed a somewhat morbid standard to categorize hongza in four classes. Houses with the most violent history, like the unit where in July 2009 a teenage girl was brutally murdered and dismembered, leaving Hong Kong in a state of shock for months, are categorized as ‘Class 4’ and are marked with four skulls. A ‘Class 1’ listing, symbolized by one skull, would show that in this housing unit, a fatal accident had happened.
According to Hong Kong’s real estate blogger scene, any of the four categories are worth investing in as long as the discount is substantial enough. They point out that it’s also important to understand who the potential target groups of buyers and tenants are. Those are people who unlike the majority of Hong Kongers tend not to believe in the haunting spirits of the deceased: westerners (like the one who didn’t mind that there had been a suicide victim in the flower pots of his posh Mid-levels apartment’s terrace), believers of the Christian faith in general, and people working in the medical sector because they are, in the opinion of Mo Yo-Wan, the blogging real estate speculator, “likely to be accustomed to death.”
4 skulls: a crime, e.g. homicide has happened; case has been reported on by the media
3 skulls: crime has happened, but no media coverage; gradually forgotten
2 skulls: suicide, no media coverage
1 skull: fatal household accident
Not included: death by natural causes
Unlucky houses: Hot investment opportunity to Hong Kongers, hot potato to Taipeiers
In July 2008, the Taipei District Court had to judge over a law suit, where a woman with the last name Gao bought an apartment on Taipei’s Jilin Road.
After Mrs. Gao had completely paid the house price, she found out that in the past a severely decayed corpse lay in house for many days.
Gao was so shocked that she didn’t dare to continue living in the apartment and she demanded that the old owner, surnamed Lai, repays the house price.
To the Taiwanese property market, xiongzhai, as 凶宅 is pronounced in Mandarin, have always been regarded as hot potatoes. Since the public’s acceptance level is very low, real estate brokers, speculators and average house buyers are very keen on keeping their hands off houses that were scenes to unnatural deaths.
In the Ministry of Interior’s ‘Guidelines for real estate matters’(不動產說明書應記載事項), xiongzhais are not mentioned and it is neither a term that can be found in any Taiwanese law book. However, to the public the definition ofxiongzhai is not too complicated: it’s a property where a homicide or suicide has happened.
“If someone jumped to death from the property’s window or roof, it also counts, even though the person didn’t actually die in the house.” Su Yi (蘇儀), of the real estate agency MyGo, elaborates on the company’s website in a precise and macabre way on what a xiongzhai is.
When houses change hands, sellers are supposed to provide a ‘standard property status description form’ (不動產標的現況說明書).
That form clearly points out whether or not in the past a homicide or a suicide happened. If the seller deliberately hides the property’s grisly history, the buyer has the right to terminate the contract and to demand full repayment.
In Taiwan’s judicial practice, xiongzhai-matters don’t depend on the causes of deaths. To the courts, the focus lies instead on whether or not a previously happened death or violent crime leads to a negative impact on residents’ psychological wellbeing or property value.
The Taipei District Court ruled that the decaying corpse in the apartment Mrs. Gao bought did lead to a serious negative impact on the residents’ psychological wellbeing. Lai, the seller, signed a contract in which he guaranteed that the house is free of radioactive contamination, not built with beach sand (which leads to quickened corrosion of steel reinforced concrete), and neither has been scene of an unnatural death.
Lai argued that police investigations didn’t prove that the deceased was either murdered or committed suicide, so in his opinion there was no breach of contract.
The court reasoned that the cause of the deceased’s death wasn’t clear. The corpse wasn’t timely buried according to local customs, and decayed in the apartment, so in accord with normal social values, the new owner can hardly avoid disgust and fear.
Therefore, the court ruled that even though the occurrence of an ‘unnatural death’ could not been proven, the contract was void from the beginning. Lai had to repay Gao the full amount.
Su Yi (蘇儀), the real estate agent, gives three tips on how to avoid to mistakenly buying a xiongzhai:
1. talk to the neighbors
2. inquire with the nearest police station
3. check websites like www.unluckyhouse.com
The Taiwanese website www.unluckyhouse.com Su refers to is a forum for the exchange of xiongzhai data. When users have come across media reports on crimes and suicides, they can feed the database with addresses which are often disclosed in detail by the Taiwanese media. Prospective house buyers and tenants can check on the background of a certain property.
And whereas normally after news of unnatural deaths make the round, people tend to ask ‘Who?’, ‘How?’ and ‘Why?’, visitors to http://www.unluckyhouse.com, however, solely focus on the ‘Where?’.
A user with the login name Scorpian inquires: “… heard that in Taipei’s Nangang National Housing someone jumped… Is there anyone who knows which block, which floor?”