Land is growing in popularity as an investment for North
Korean officials and the newly affluent elite. As a result of this shift in
investment emphasis, demand for single-storey houses in desirable urban areas has
begun to outstrip that for apartments, Daily NK has learned.
As in South Korea, a nice apartment has long been a symbol
of power and reputation in North Korea. However, single-storey houses offer
the opportunity for higher returns on investment thanks to the footprint of the
land upon which they sit. This has even led to cases of relatively nice apartments
being bartered for much older single-storey houses.
A Daily NK source in South Pyongan Province reported on the
24th, “Apartments used to be thought of as the best choice among all
the housing options, but this has now
shifted to houses. Powerful folks have come down to single-storey homes;
they’ve all become ddangjjigi [owners of significant areas of land].”
“The middle classes still prefer their apartments,” the source
acknowledged, “But the way that cadres and other moneyed elites are looking toward single-storey
houses cannot be overstated. All you do is fence in 60 pyeong [a
Korean unit of measurement equaling 198sq. meters] of land round the house on the pretext of having a
vegetable garden; if you do that then everything within the fence becomes yours.”
The source further explained how some provincial Party
officials in South Pyongan Province have started working with officials from the state Rural Management Committee to fence off plots of land for themselves.
“In this province, there are these Party officials who earned foreign currency in Russia before they came back. Now they’ve
started coming out in ones and twos from the apartments that were given to them by the Party.
They say this is because they want to set up second homes. Working in
conjunction with the Rural Management Committee, they’ve built twin homes on land that
isn’t registered with the state; one for the family of the Rural Management Committee official,
and one for the Party cadre and his family.”
“A month ago the manager of a local factory bartered his
apartment for a small house next to a main road,” the source further recalled. “Given that the occupant of the
house was living hand to mouth, it could not have been worth more than $5000,
whereas the apartment would have been worth something like $30,000.”
The buyer immediately began tearing the existing structure
down to build a new one in its place, having chosen the property for its parking and location near trade routes. “The new owner is obviously someone with one eye on the
future,” she mused.
It is estimated that a single-storey house near a public
market can be bought today for around $5000, whereas the advance purchase of an
apartment in the vicinity of a railway station is approximately $20,000. Therefore, more and more people are seeking to buy the former in order to tear it down and replace it with a new
structure. The source noted that construction companies are also recording
good profits as a result.
The source speculated on the cause of this shift, saying that it stems partly from people’s growing awareness of the value
of land, which is one result of outside information flowing into the country. “Even
the small amounts of information that people can get hold of in markets or wherever is
making them see that land prices are going to rise faster than anything else. Even
if the house is shabby, you should go for a place with land; these days, hoping for a nice apartment is just pretentiousness.”
However, there is some agitation at the rush toward land,
the source said. “There are these people building houses at
this juncture, a time when other people are going hungry because they can’t even buy the rice for one meal a day,” she
conceded.
