Saturday, March 31, 2012

Agents Make Killing On 'Haunted Houses'

The reputation of estate agents will not be improved by their latest marketing ploy - listing so-called "haunted houses" for sale or rent because the occupants have died. The property descriptions come complete with the gruesome details of the occupants' deaths. Jilted girlfriends who commit suicide and drug addicts who accidentally set themselves alight do little for a property's value, which mean the canny buyer can grab a bargain in the city's cutthroat housing market. That's the theory behind the "Haunted House" section recently launched in English on Hong Kong property website Square Foot. The online agency believes that while Chinese homebuyers may find the subject taboo, some expatriates will jump at the chance of cheaper housing. Square Foot trawls local media, for details on all current deaths - either by murder, suicide, accident or natural causes. The company has already hailed it a success, despite the fact that according to the code of ethics issued by the Estate Agents Authority, agents are under no legal obligation to tell prospective tenants if there has been a death at a property. Square Foot's database covers all of Hong Kong and the listings can be searched by address, date and district. Shrewd local landlords have also spotted a good opportunity to make some money."We know of investors who buy these haunted houses so that they can have a very good rental rate if they aim solely for expatriates," said Kenny Wong, Square Foot marketing manager. "It makes for a very good return for the investor if you can buy the property cheaply, because of its history, and then charge a higher rental rate to expatriates." Depending on the location, Wong said landlords can get up to a 10 per cent return on their investment. But if there are no expat takers, the landlord is generally left with an empty apartment on his hands that no one wants to rent, Wong added. "For Chinese renters or buyers, if a death has happened in a house, we have found that the property's value may drop by 30 to 50 per cent as local people will not be interested in it," Wong added. "But it has proved to be very successful as expatriates don't mind living in what many local people would say is a haunted house." Wong added this not only related to the property where the death took place, but also affected the sale or rent of apartments on the same floor.