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Hong Kong's Starry-Eyed Investors : Real estate: Fortune tellers can influence prices of offices and apartments, brokers say.

July 26, 1993|From Bloomberg Business News

HONG KONG — Prices in the territory's luxury property market are heading sky-high. To the stars, you could say.

One reason is because Chinese feng shui masters, or traditional fortune tellers, influence prices for the territory's offices and apartments, real estate brokers say.

" Feng shui definitely has some impact on property," said Virginia Wai, associate director of residential sales at property management company Colliers Jardine Ltd.

"People will pay a little bit higher than the market price" for a building deemed lucky or safe by a feng shui practitioner, she said.

Wai said she had come across buyers willing to pay up to 5% more than the going average rate for a new apartment that has "good" feng shui .

Much of the demand for Hong Kong real estate is coming from mainland Chinese.

Soaring inflation in China and a tumbling yuan have driven investors from domestic Chinese investments and helped draw massive sums into gleaming office towers and lavish apartment complexes in Hong Kong.

Mainland Chinese investors pumped more than $1.5 billion into Hong Kong's property market in the first five months of this year, the Vigers report said.

Local investors in Hong Kong also think of real estate as a good investment, said Tony Darwell, director of research at property consultant Jones Lang Wooton.

Interest on regular savings accounts, meanwhile, is hovering about 1.5%, but the government predicts inflation will run about 9.5% for all of 1993.

That means investors get a negative return on their bank deposits.

Many Chinese, from both the mainland and Hong Kong, make a practice of consulting Chinese feng shui masters before closing a sale.

The service is not cheap. The cost to have a feng shui practitioner visit a piece of property can cost anywhere from $500 to $6,400, depending on the size of the property and the feng shui master's reputation, said Hugo Poon, director of City Property Consultants.

Real estate brokers say feng shui is just one of the elements that determine a property's price, along with location, convenience and other standard measures.

"It's difficult to quantify the effect of feng shui ," Poon said.

But certain buildings, like the pricey Shun Tak Center office building in Hong Kong's central district, command higher prices in part because they have good feng shui , he said.

In ancient times, feng shui was used to determine burial sites. Chinese have also depended on feng shui for centuries for the most propitious placement and design of their buildings.

Some of the basic rules have to do with the direction a building faces, the height and its surroundings. A feng shui master might also make recommendations on the color of a building or on use of certain materials.

Hongkong Bank, which occupies one of the most striking office towers in Hong Kong, consulted a feng shui expert when it drafted designs for its building in the early 1980s. As a result, the architect changed the placement of the building's entry-level escalators.

The original design had the two escalators back to back.

However, the feng shui man's warning that such a configuration would draw all of the bank's wealth out into the harbor, persuaded the bank to place the escalators at an angle to one another instead.

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