While North Korea’s marketplaces are facing business difficulties due to rising prices and sluggish spending, nearby houses remain in high demand.
“While market vendors are lamenting business conditions, houses in the area remain very popular. They’re the preferred residence of anybody connected with the market—both those doing business there and those making money in other ways,” a source in Ryanggang province told Daily NK recently.
When the North Korean government’s rationing system collapsed during the 1990s famine known as the “Arduous March,” a system of informal marketplaces known as jangmadang developed that has played a critical role in supporting North Koreans’ livelihoods.
With the marketplaces serving as the center of North Korea’s economic activity, market access became the crucial determinant of a house’s value. High demand for houses near marketplaces naturally drove up prices.
Market proximity drives housing values
In South Korea, the primary factors behind housing prices include subway proximity, neighborhood amenities, and commuting distance. But in North Korea, housing value depends on the ease and convenience of market activity.
In the city of Hyesan, for example, houses near the market have long cost more than houses in other areas. Assuming two houses of the same size, a house near a marketplace sells for around 30,000 Chinese yuan (approximately $4,200) while a house further away costs around 18,000 yuan (approximately $2,500), suggesting that market proximity adds at least $1,400 to a home’s value.
This price gap remains intact, and houses close to marketplaces continue to command high values despite the recent contraction in market activity.
“Houses near marketplaces continue to be in demand, even when they’re rundown or expensive, because their location is considered advantageous from a business perspective. Those houses remain very popular despite the fact that a market booth isn’t the money maker it used to be,” the source said.
There are various practical advantages to living near a marketplace. Owners can more easily move goods to market stalls, run a stall in their front yard at any time, and store the goods of other merchants to create additional income.
“Vendors who live far from the market have no choice but to keep their goods at nearby houses. The price of homes near markets hasn’t fallen because owners can earn steady income just by storing merchants’ goods,” the source said.
Confidence in markets remains strong
North Koreans often say that living near a market is a guaranteed meal ticket, the source explained. That also makes people with market-adjacent houses reluctant to sell without a very good reason.
“When times get tough, people often try to sell their apartment and move into a one-story house near a marketplace, but no one is willing to sell. The markets may be struggling now, but there’s a widespread belief that they’ll bounce back before long. There’s deep-rooted confidence in markets that goes back to the Arduous March,” the source said.
“North Koreans have always strived to survive on their own, but things are really tough right now. Considering that the marketplaces provided a lifeline for people during a time of severe economic hardship, I hope the day will come when people are able to make a decent living there once again.”
