Korea Central News Agency (KCNA) recently reported that North Korean leader Kim Jong Un made an on-the-spot visit to “guide” construction plans in Sinuiju, North Pyongan Province. The words of the Supreme Leader appear to have impacted the local real estate market as apartment prices began to rise soon after the broadcast, North Korean sources have reported.
“Following the Chairman [Kim Jong Un]’s guidance for the Sinuiju development plans, the prices of apartments began to rise,” said a North Hamgyong Province-based source on Tuesday. “People who were selling new apartments and reasonable single-story houses are now taking them off the market because prices are expected to rise.”
Luxury apartments in Sinuiju had fallen in price by an average of 30-40,000 USD as late as October. The gradual fall in housing prices from August was thought to be due to haphazard construction practices and an oversupply of housing in the area.
However, statements made by Kim during his visit have boosted confidence within the housing market and prices have begun to slowly rise again.
“The prices have increased 30-40 percent over the past two months, on average,” a source in North Pyongan Province reported.
Moreover, he added, donju (North Korea’s nouveau riche) and power elites who live in major cities like Pyongyang have been on the lookout for investment opportunities in the real estate sector. Many of them are now convening in Sinuiju, adding further fuel to the price rises.
“The role of the market along with the advance knowledge the power elite and donju (new moneyed middle class) received in regards to the Sinuiju development plans likely played a role in the rise in prices,” a North Korea expert working at a South Korean government-run research institute told Daily NK on condition of anonymity. “The authorities probably realized they can use the donju and power elite to develop Sinuiju faster.”
Nevertheless, ordinary residents in the area likely view the rise in housing prices induced by the Supreme Leader’s words with frustration, as home ownership has become more difficult.
Ordinary residents in the area will also likely be negatively affected by the mass construction projects occurring in the city.
“North Korea cannot bring in much foreign investment due to international sanctions. The authorities are thus expected to order North Koreans throughout the country to help out with the development projects in Sinuiju,” a high-level defector said. “People are already being worked to the bone because of the Samjiyon and Wonsan developmental projects, so if the authorities ask them to support the Sinuiju projects too, frustration will skyrocket.”