Hwagyo investors fuel building boom

Construction of new apartment buildings is
being accelerated in North Pyongan Province’s Sinuiju and Hyesan, Yanggang
Province, with low rise apartments fetching the highest price at nearly US
$10,000. Unlike Sinuiju, which has high rise buildings, Hyesan is mainly
constructing low rise apartments. Apartments at or above the fifth floor are
being called “Royal Suites,” and selling for big money, according to inside
sources. 

In a telephone conversation with the Daily
NK on October 1st, a source in Yanggang Province explained, “Hyesan is
currently undergoing a makeover. New apartments are going up all over the city.
Residents are preferring the high rise apartments despite their relative
scarcity, or perhaps because of it. Right now a fifth floor, two room apartment
(approximately 80-120 square feet) sells for 60,000-70,000 Yuan (US $10,000-
$11,000) is the most expensive.”
 

Another source in Yanggang Province
confirmed this development.
 

In Hyesan, the lower floors go for much
cheaper; apartments in floors 1-3 usually sell for about 20,000 – 25,000 Yuan
(US $3,000 – $4,000). 

“The prices tend to be tied to the floor level like
this,” she explained.
 

“By the time the Korean Workers’ Party
Foundation Day holiday arrives on October 10th, Hyesan will look like a totally
new city. But construction is not limited to Hyesan; we also see apartment
buildings shooting up in Hyesan’s suburbs and riverside regions, in Tabsongdong
near Hyesan Stadium, and in Hyemyeongdong, an area filled with statues of Kim
Il Sung and Kim Jong Il.”
 

Added the source, “Much of the construction
is due to investment from the Hwagyo 
[community of overseas Chinese]
residing here. They buy one story
houses at a very cheap price and then build up a multi-storied apartment and
sell it off.  They are making a good amount of money through the sales,
but the residents are happy to be enjoying the more modern living spaces, so
it’s a win-win.”
 

When asked why the residents prefer
apartments on higher floors, the source said that “people are less worried
about theft of furniture and large appliances when they live higher up.”
 In years past, she asserted, most people preferred to be ground level so
that they could have access to the yard for planting vegetables. But now, “
lots of folks are worried about flood damage during the rainy season or the
possibility of theft.”
 

She continued to describe the state
of one story homes, saying, “houses near Nongnim University or the Hyesan train
station sell for approximately 25,000 Yuan (US $4,000). Homes in Yeonbong Il Dong
sell for rather cheap at 5,000 Yuan (~$800). However, there are some pricier
places in Yeonbong located near the jangmadang (marketplace) that sell for
about 20,000 Yuan (~US $3,000).”   
 

Last week the currency conversion rate in
Hyesan was 1 Yuan/1320 KPW. That means that a 60,000 Yuan apartment sells for
about 80 million KPW (~US $70,000) and a cheaper home selling for 5,000 Yuan
sells for about 6.5 million KPW (~ US $7,000).

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