Illegal Trade in North Korean Homes Flourishes

2013-05-07
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This photo released by the Korean Central News Agency on June 1, 2012 shows North Korean leader Kim Jong Un (C) visiting an apartment building in Pyongyang.
This photo released by the Korean Central News Agency on June 1, 2012 shows North Korean leader Kim Jong Un (C) visiting an apartment building in Pyongyang.
AFP PHOTO / KCNA via KNS

A black market for home sales is thriving in North Korea even though all residential houses are owned by the government and trading on them is forbidden, sources inside the reclusive country say.

Corrupt officials approve the illegal transfer of the homes in exchange for bribes as they cash in on an acute shortage of homes, the sources told RFA’s Korean Service.

Houses in the more affluent districts are much sought after and traded through brokers who milk the sellers and buyers of commission and pay bribes to the relevant officials, the sources said.

Residential homes in areas along or near the border with China enjoy a certain premium due to the bustling bilateral trade and the ability of homeowners to use mobile phones using signals obtained from Chinese transmission stations.  

The “sale” of government real estate is now widespread in North Korea, said a source in Sinuiju, the capital of North Pyongan province and part of a special administrative region across the border from Dandong in China’s Liaoning province.

“There are many brokers who sell houses and usually get 1 percent of the price as commission from both the seller and buyer,” the source told RFA’s Korean Service, speaking on condition of anonymity.

“They offer bribes to [officials in] the department of housing allocation, so they can easily solve the matter of obtaining a ‘license’ to get into a house legally,” he said.

He said flourishing trade and a lack of sufficient homes have allowed residents in cities across the border with China to sell the homes they have been assigned by the state to other individuals at huge costs.

“Houses in Sinuiju are sold at a higher price than those in Pyongyang—although they are not the same price as the Chinese houses in Dandong on the other side of the river,” he said.

“It is easy to earn money by ‘selling’ them because they act as gates to China.”

Virtual housing market

Private ownership of homes is illegal in North Korea, but residents of Pyongyang who make frequent trips to China and residents of cities on the border between the two countries told RFA it is no longer strange to hear about “sales” of government properties between individuals.

According to a virtual housing market for North Korean civilians, the country’s most expensive homes are located in Sinuiju, with Hyesan city in northern Yanggang province next in cost and Pyongyang in third.

A single family home or large apartment in what is deemed a good location in Sinuiju can fetch around U.S. $30,000, while those in the suburbs of Pyongyang and other border cities are priced less.

While houses are being built everyday in Pyongyang to supply a growing demand, it is difficult to find new homes in other cities, leading to a rise in the cost of real estate, the sources said.

A resident of Hyesan told RFA that homes in cities like his, near the border with China, command the highest prices on the black market because they provide access to Chinese money and infrastructure.

“I can’t say all houses in Hyesan are expensive, but those which are good for the smuggling trade and receive a clear Chinese cell phone signal are really high priced,” the source said, speaking on condition of anonymity.

“Several houses by the riverside are even priced similarly to Chinese houses on the opposite side of the border in [Jilin province’s] Changbai city,” he said.

Sources told RFA that the North Korean government has canceled licenses several times in recent years, issuing statements which describe the practice of housing transactions as an “offence against the system of the North Korea.”

But attempts to stamp out the trend have repeatedly failed as those involved in the sales include untouchable high-ranking officials and because the practice is too far reaching.

Reported by Joon Ho Kim for RFA’s Korean Service. Translated by Goeun Yu. Written in English by Joshua Lipes.

CH. 1: MANDARIN | CANTONESE

CH. 2: VIETNAMESE | BURMESE | KOREAN

CH. 3: KHMER | LAO | UYGHUR

CH. 4: TIBETAN

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