North Korea’s soaring real estate prices stem from wild swings in the won-to-dollar exchange rate, creating a market where prices climb but sales stagnate.
“Housing prices in Hyesan have jumped 20-30% from last year. But while prices keep rising, that doesn’t mean more houses are actually selling,” a source in North Korea’s Ryanggang province told Daily NK recently.
The surge in housing costs reflects the North Korean won’s steep decline as exchange rates fluctuate dramatically. Homeowners are setting sky-high asking prices, fearing their currency will lose even more value before they can close a deal.
In Hyesan, a single-story house that sold for 15,000 Chinese yuan (around $2,090) just last month now carries a 17,500 yuan price tag (around $2,440) — a 2,500 yuan ($348) jump in less than 30 days.
During more stable periods, homeowners would stick to their original asking price in dollars or yuan until finding a buyer. Now they’re adjusting prices daily as exchange rates climb.
Foreign currency becomes the only option
The currency volatility has pushed homeowners to demand payment entirely in foreign money rather than accepting partial payment in North Korean won. Previously, sellers would often take 20-30% of the purchase price in local currency. With exchange rates soaring, won-based real estate deals have nearly disappeared.
Property sellers now insist on full foreign currency payment for two key reasons: they want to avoid losses if the won keeps sliding, and converting large amounts of North Korean won into foreign currency has become extremely difficult.
“Market vendors even want condiments paid for with foreign currency, so you can imagine the situation for real estate deals. Right now, homeowners simply refuse to sell to buyers trying to pay in North Korean won,” the source explained.
Rising exchange rates have inflated the cost of everyday goods, prompting homeowners to push their asking prices even higher to keep pace with inflation.
“Prices typically rise when more people want to buy houses than are willing to sell. But since our currency has fallen so low and goods cost so much more, homeowners feel compelled to raise housing prices just to stay ahead of inflation,” the source noted.
Yet with real estate prices reaching such heights, actual buyers have virtually vanished.
“Sellers keep demanding more money than buyers can afford, so everyone’s just waiting for something to change. Housing prices may be high, but almost nothing is moving,” the source said.
The lack of sales hasn’t stopped prices from climbing, driven entirely by exchange rate pressures.
“People have always said the local currency is worthless, but it’s worth even less now. That’s why housing prices keep going up even when nobody’s buying,” the source concluded.
