Real estate market in North Korea

While North Korea has historically been a very secretive nation and one which is still technically at war with South Korea, an exhibition opened this week looking at life in North Korea. The exhibition is situated in South Korea with a replica middle class home based on Pyongyang which is the capital city (and largest city) in North Korea (aka the Democratic People’s Republic of Korea). There have also been some very interesting observations about the North Korean property market which would appear to be booming despite United Nations sanctions and recent controversy regarding the development of nuclear warheads.

Life in North Korea

In many ways, as demonstrated in this exhibition, North Korea is stuck in the past with regards to decor styles. This replica of an apartment from Pyongyang has North Korea music playing in the background, vintage curtains, old-style wallpaper and a lace throw covering a dark beige velvet couch. While there is a flatscreen television, this is accompanied by “functional” custom-made furniture. At first glance this looks like an army style barracks but it is in fact a middle-class family apartment.

It is worth noting that strictly speaking the buying and selling of property is banned in North Korea which is one of the world’s last remaining truly Communist countries. Under the surface there is a black market in housing assets where those with money are said to regularly bribe officials to obtain better housing facilities. Indeed there is a rather strange phenomenon in North Korea which will regularly see high-rise properties assigned to individual professions such as scientists, professors, etc – keeping workers in one place.

Foreign investment

Despite trade and political restrictions in North Korea it seems that significant overseas investment is still finding its way to cities such as Pyongyang. Since it Kim Jong Un took control in 2011 there has been significant investment in infrastructure and housing estates. While all development is controlled and monitored by the state, there have been a number of joint ventures between the North Korean government and foreign investors. Quite how safe these arrangements are with regards to legality and change is another matter!

It is also interesting to see that while apartments are still dominated by decor compared to that seen in Seoul back in the 1980s it is totally different with regards to the business skyline. The skyline of Pyongyang in particular has changed beyond all recognition since Kim Jong Un came to power with modern architecture and street scenes now commonplace.

Political relations

North Korea has always had aspirations to unite South Korea under the leadership of Kim Jong Un and bring the nation back together. The fact that South Korea has a very strong and loyal ally in the US has caused constant friction and concern in the region. It is therefore interesting to learn that the real estate market in North Korea and in particular Pyongyang is booming. This will no doubt prompt many questions about where this international finance is coming from and who is dealing directly with the North Korean government.

Looking at Asia from a distance, and in particular North and South Korea, it does seem almost inevitable there will be military action. However, for those living and working in North and South Korea life goes on under the constant threat of military action. It will surprise many to learn that the North Korean real estate market is booming even if every element of personal and business life in North Korea is controlled by the government. Are you brave enough to invest in North Korean or even South Korean real estate?

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