.jpg/dims/resize/740/optimize) |
Even though North Korea is often described as a "Stalinist" nation, this label has long become anachronistic. The last 15 years have seen the dramatic rise of the market economy in the North.
On paper, nearly all houses in North Korea belong to the state. The only accepted exception are individual houses lived in by the same family since 1945. If such a house was the private property of the family in question before liberation they are still considered to be owners of the house ― but the number of such houses is very small.
Nonetheless, the housing market does exist in North Korea. Entrepreneurial North Koreans have found a loophole in the rather strict real estate laws in their country. While property sales are banned, it remains perfectly legal to swap your houses with someone else ― that is, as long as both houses are located within the same town or county.
Therefore, people swap good houses for inferior accommodation and receive very significant compensation from the buyers of their house. In some other cases, rich North Koreans use the accommodation exchange scheme to acquire an almost unlivable shack which they then demolish and replace with rather more luxurious accommodation worthy of a successful currency dealer or wholesale trader in footwear.
The prices of new houses vary greatly depending on location and the type of house itself. Predictably enough, Pyongyang is most expensive. A good flat in a high-rise block of flats in downtown Pyongyang would set you back around $50,000-60,000; the most prestigious accommodation is sold for more than $100,000. One should keep in mind that the official monthly salary in North Korea is approximately $1, and the average family monthly income is, perhaps, $50.
In the countryside on the other hand, prices are much lowers. For example Professor Chong Ung-i has recently completed a survey of the real estate prices in the city of Musan ― a major mining centre located on North Korea's border with China.
The best and most expensive properties in the city of Musan are those for people who have received awards from the state. Their apartment complex was built in the early 1990s ― on the eve of the famine ― to house people who have done exemplary things for the North Korean state (retired military officers, exemplary workers and the like). However, few of these initial inhabitants still live there. In most cases these people did not fare well in the post-1994 North Korea, so they eventually sold their apartments to corrupt officials and successful merchants.
It is not surprising that this particular apartment complex is so popular amongst the moneyed inhabitants of Musan. These apartments are modern, each flat has a flushing toilet and bathroom (the only apartment complex with such amenities in the entire town), and even though the tallest building is seven floors high, it has a reliable supply of water and electricity. This is easy to explain: the successful inhabitants are willing to pay some money to local power grid managers, ensuring that they are the last to lose power during the frequent power blackouts.
A three bedroom flat in this apartment complex would set you back around $7,500 in 2012. The flats on the higher floors are somewhat cheaper because roofs occasionally leak, and the ground floor accommodation is not very popular either, even though in some cases ground floor flats are bought by entrepreneurs who want to use the space as a shop (contrary to what you might think, there are a great number of private grocery shops in North Korea nowadays).
Most of the new owners have invested money into renovating their apartments. Old cement floors in the kitchens are now covered with nice, cozy tiles, and in some cases, electric heated floors were installed as well.
This luxurious apartment complex is the exception, though. Flats in multi-story buildings nearby fetch merely $3,000 or slightly more. This is understandable since cheaper, older apartments do not have individual bathrooms and toilets, and show much more wear and tear.
The prices of individual houses in Musan vary greatly ― from merely $1,000 for an old derelict hut to nearly $10,000 for a recently build, spacious mansion in an expensive neighborhood (yes, expensive neighborhoods have begun to emerge in North Korea as well).
At any rate, the real estate market has emerged in the North, for better or worse. The official media remains silent on the subject, and it is widely believed that apartments should be given to the people by the state, free of charge, but such beliefs no longer hold much currency. Real estate is just another type of merchandise in North Korea, like it or not.
Professor Andrei Lankov was born in St. Petersburg, Russia, and now teaches at Kookmin University in Seoul. You can reach him at anlankov@yahoo.com.
![[ANALYSIS] Tesla, BYD's price cuts unnerve LGES, Samsung, SK](https://img.koreatimes.co.kr/upload/thumbnailV2/b1cf8ba68d474cb69352bfe7ea9d14f0.jpg/dims/resize/178/optimize)
![[INTERVIEW] How ATEEZ achieved worldwide success](https://img.koreatimes.co.kr/upload/thumbnailV2/c7723b56dde94eb4b260950d368fe8fb.jpg/dims/resize/178/optimize)
