{"id":4306,"date":"2019-08-13T17:37:06","date_gmt":"2019-08-13T08:37:06","guid":{"rendered":"http:\/\/www.01.asiapress.org\/rimjin-gang\/?p=4306"},"modified":"2019-09-19T12:56:13","modified_gmt":"2019-09-19T03:56:13","slug":"pyongyang-properties","status":"publish","type":"post","link":"https:\/\/www.02.asiapress.org\/rimjin-gang\/2019\/08\/society-economy\/pyongyang-properties\/","title":{"rendered":"\uff1cInside N. Korea\uff1e Price Plunge: Pyongyang Properties Depreciate Severely as Sanctions Knock Housing Market Nationwide"},"content":{"rendered":"
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An apartment in Pyongyang being built by mobilized soldiers and youth groups (ASIAPRESS)<\/p><\/div>\n

Apartment prices are reportedly plunging across North Korea in the wake of economic sanctions. To investigate, ASIAPRESS conducted a survey in Pyongyang, Hyesan- a city in the northern province of Ryanggang, and Hoeryong- a city in the central province of North Hamkyung. The survey found that apartment prices in Pyongyang, in particular, took a heavy hit. (Apartments are bought and sold in Chinese yuan in the central and northern regions of the county and in U.S. dollars in Pyongyang. In our report, however, all prices appear in South Korean won.)<\/p>\n

\u25c6 Prices in Pyongyang cut by more than half<\/h2>\n

In June and July, ASIAPRESS met with two Pyongyang trade officials on business in China. They said that, as apartment prices in Pyongyang vary widely depending on the area, they would limit their discussion to the high-end apartments in the city center. For background, though many high-rise apartments have been built over the last 7 years under Kim Jong-Un\u2019s orders for the redevelopment of Pyongyang, most of the city\u2019s apartment buildings were built in the 70\u2019s and 80\u2019s.<\/p>\n

The 2 men gave near-identical accounts of the situation, with their descriptions yielding the following details:<\/p>\n

Large, 100 square-meter apartments in Pyongyang\u2019s most expensive, downtown area used to cost 81-97 million won in 2016, before the sanctions were tightened. Now though, prices have plunged to 21-48 million won, with some apartments costing 50-70 percent less.<\/p>\n

In addition, apartment prices in the downtown area have taken a big hit due to stronger security measures. One of the trade officials said, \u201cIn June, under direct orders from Kim Jong-un, the authorities took cement and blocked the verandas of all apartments that looked out onto important buildings such as the Workers\u2019 Party building. They were worried about snipers. Thus, the prices of some of the best apartments in the area have plummeted, with no one willing to buy them for even just a million won.\u201d
\nRimjin-gang Report - Pyongyang Construction Sites to Build 100,000 Apartments (2011) North Korea<\/a><\/p>\n

The verandas of downtown apartments were blocked by the secret police to stop owners from coming out, but the concrete is also blocking light from coming in. With no natural light coming through the blocked windows, the apartments now have no interested buyers.<\/p>\n

According to the South Korean Trade-Investment Promotion Agency (KOTRA), North Korea\u2019s trade volume in 2018 fell by 48.8% from the previous year, with exports falling by about 86% and imports by 31%. International sanctions have completely blocked exports of coal, minerals, and seafood products, having a huge knock-on effect on Pyongyang\u2019s apartment market, as profits from these industries were mostly funneled to the capital.
\n\uff1cInside N. Korea\uff1e State Welfare: Citizens Forced to Enroll in State Insurance Plan to Prop up Government<\/a><\/p>\n

Next page : \u25c6 The situation in the trading city of Hyesan<\/strong><\/p>\n

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Map of North Korea (Produced by ASIAPRESS)<\/p><\/div>\n

\u25c6 The situation in the trading city of Hyesan<\/h2>\n

With the Yalu River flowing between them, the city of Hyesan sits across from Changbai City in China\u2019s Jilin Province. This close proximity has benefited Hyesan greatly, with the city enjoying active trade with China. In terms of economic prosperity, the city ranks only behind Pyongyang and is followed by the special economic zone of Rason and the larger border city of Sinuiju.<\/p>\n

A reporting partner, who investigated the real estate situation of downtown Hyesan City, said, \u201cWealthy people have been hit by the sanctions, so there are few apartments selling. Before the sanctions were tightened, apartments that were worth 34 million won were being sold for about 25 million won. High-end apartments on the fifth and sixth floors of buildings, which were being sold for about 55 million won, are no longer put up for sale, simply as there are no buyers showing up. Meanwhile, previously-owned, single story houses, in front of the market in Hyekang neighborhood, used to cost between 680 thousand and a million won up until 3 years ago, but now go for only 500 to 680 thousand won.\u201d<\/p>\n

As for why prices have gone down, the reporting partner cited poor trade under the sanctions as the first reason. In addition, privatel smuggling, which had been thriving, has been totally blocked due to strengthened crackdowns. With all of this having an effect, the excessive supply of apartments in Hyesan has led to a drop in prices over recent years.<\/p>\n

The reporting partner continued, \u201cIn the city of Hyesan, where Chinese trade has grown so much, many apartments have been constructed over the past few years in cooperation with the state-operated Urban Construction and Trade Corporation. Funds for the construction projects were often raised by North Korea\u2019s emerging class of wealthy elites, called the \u2018donju\u2019 or, instead, by Chinese companies. The first and second floors of the buildings would be dedicated to shops run by trading companies and the upper floors would be for residences. The authorities are now aiming to gain a profit from refurbished, old apartments in the city\u2019s Wiyeon district but even these are not selling well.\u201d<\/p>\n

\u25c6 The situation in Hoeryong City<\/h2>\n

A similar trend is evident in Hoeryong city. A reporting partner in the city said, \u201cBefore the sanctions, in 2016, prices of new, 80 square-meter apartments were between 120 and 170 thousand won. But the value of all apartments have fallen by 30%. There is still the odd sale every and then though.\u201d<\/p>\n

Barring a few exceptions, all houses in North Korea are state-owned. A black market for houses was first spawned in the 1990\u2019s, though, when the death toll of the famine left houses standing empty. Residential registration cards, also known as admission certificates, were bought and sold by private citizens, as the state\u2019s crippled finances made it impossible to maintain the old system of state-provided housing.<\/p>\n

Although the private sale of apartments is still, technically, illegal, North Korea\u2019s emerging wealthy class and the trading companies they operate have been able to build apartment buildings under the banner of state institutions and directly sell residence registration cards. After making sales, the companies pay back a small percentage of the profits to the state.<\/p>\n

[Special Report] \uff1cInside N. Korea\uff1e Shaken by Sanctions- Regime Takes a Direct Hit as Pyongyang\u2019s Privileged Feel the Pressure<\/a><\/p>\n

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