Pyongsong prime real estate prices are skyrocketing

Seol Song Ah  |  2017-01-06 14:03
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The price of a single unit in an apartment building near Yokchon-dong of Pyongsong City, home of the largest distribution wholesale market in North Korea, has jumped to approximately 60,000 USD. The residential building in question is near a railway station and major roads, while members of the new monied class, known as the donju, owning large-scale business have competitively purchased units in the building, leading to the sudden price jump.

"The price of a unit in this building near Yokchon-dong, located near the railway station and a major road leading to Pyongyang and Sinuiju, has sharply risen to 60,000 USD from 40,000 USD. Although the building is not in the center of the city, many wholesale vendors want to buy these homes, resulting in the price jump, a source in South Pyongan told Daily NK on January 4.

"The residential property is attractive to major market heavyweights even though it wasnt built recently. Ease of transportation seems to be the major pulling factor.

Pyongsong City is home to Doksan Farmers Market (formerly Pyongsong Market),  the largest wholesale market in the nation. The market is constantly busy with merchants from other regions because it not only offers trade in commodities but also deals with the labor market, foreign currency, and the services sector.

Previously, the real estate trade was prohibited in North Korea, but the authorities have tacitly permitted it since the 1990s, with an increasing number of people now purchasing houses. Due to restrictions in North Korea that make it difficult to move about freely, merchants prefer to reside closer to the market.

"In the past, Okchon-dong was more popular because the General Market was located in it. But there were many problems because it was difficult for the wholesale merchants with big vehicles like trucks to come and go along the narrow roads. For this reason, Yokchon-dong became more popular because they can directly unload their cargo near the residential area, which is located at a major transportation hub," an additional source based in Pyongsong said.

"Before Pyongsong Market moved, the prices for the apartments located near the market square were expensive, but dropped as soon as the market relocated. In 2009, the market re-opened as Doksan Farmers Market in the Okchon area [which is why locals generally refer to it as Okchon Market]. So the price of apartments in Okchon-dong are rising due to the market, but the houses in Yokchon-dong are showing an even sharper rise," she added.

As trading can now take place virtually anywhere due to nationwide marketization trends, locations with easy transportation access are becoming sought-after hotspots, even if they are some distance from the markets. Accordingly, Yokchon-dong has become an epicenter for entrepreneurs who have accumulated wealth and influence.

"Donju residing in Yokchon-dong are well connected with the legal system in Pyongsong City, so they are expanding their market presence by supporting other wholesalers," she explained.

"Some donju even purchase multiple stalls at the markets with savings from their wholesale businesses after buying several houses in Yokchon-dong. Then they rent the stalls to other merchants and collect a portion of their profits," the source added.

*Translated by Yejie Kim
*Edited by Lee Farrand

 
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2017.08.04
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