The real estate market in North Korea appears to be stagnating as apartment prices continue to fall in major cities, including Pyongyang and Pyongsong, in tandem with falling demand for rental accommodation.
“The number of homes paying monthly rent has increased, but there’s lower demand for them,” said a South Pyongan Province-based source on September 28. “International sanctions have caused difficulties for people and they are avoiding homes that require monthly rent.”
Monthly rent in North Korea became a cultural fixture as the number of people moving [around the country] increased due to marketization. The “market generation” in particular has witnessed an increase in “individualism” that has encouraged younger adults to move out of their parents’ houses and look for rental accommodation.
Home owners have added new floors to their existing buildings or refurbished their houses to entice such renters. Moreover, the North Korean authorities are known for their laxity toward residents failing to register themselves (as required) after moving to new districts.
Some donjuLiterally "masters of money," donju refers to people who hav... More have bought multiple houses by colluding with housing managers at cooperative enterprises. They register the “state housing use permits” for these houses in their own names and rent them out.
The demand for these houses has fallen, however, and there are now frequent cases of potential renters haggling with landlords for better prices.
“Potential renters, who know that demand has fallen, ask the house owners to shave a little off the price,” said a Pyongyang-based source.
“The home owners, however, know that if they accede, the prices may never go up again, so they typically avoid haggling.”
Rent prices depend on the condition of the house, size and location.
“A house with a yard in Pyongsong may go for 10 dollars a month,” said a separate source in South Pyongan Province.
“The rent prices vary depending on the location of the house, so if it’s close to the market it may be 20 dollars, and if it’s near the city center then it may go for 30 dollars. An apartment typically goes for 40 dollars and a house in good condition can go for around 50 dollars a month.”
An additional source in Pyongyang noted that rent in the capital city is “many times more expensive than that in other areas,” and that “those paying monthly rent typically want a cheap house in average condition rather than one that is in really good condition and expensive.”
North Korea does not have the South Korean system of “jeonse” (in which large rental deposits are given to landlords instead of regular rental payments) due to the undeveloped financial sector. Renters are also not expected to provide bond money to landlords.
“If a landlord needs money, there are cases where renters will pay a year’s worth of rent in advance,” the initial South Pyongan Province-based source explained.
“Landlords may give such renters a discount of 5-7%.”
While some donjuLiterally "masters of money," donju refers to people who hav... More buy several houses and rent them out, multiple sources said that there are also cases in which poor families will rent out rooms in their houses on a monthly basis.
