{"id":2856,"date":"2016-12-26T12:22:39","date_gmt":"2016-12-26T03:22:39","guid":{"rendered":"http:\/\/www.01.asiapress.org\/rimjin-gang-2\/2016\/12\/report\/20161226-market-economy-realty-05\/"},"modified":"2018-08-24T18:20:48","modified_gmt":"2018-08-24T09:20:48","slug":"20161226-market-economy-realty-05","status":"publish","type":"post","link":"https:\/\/www.02.asiapress.org\/rimjin-gang\/2016\/12\/society-economy\/20161226-market-economy-realty-05\/","title":{"rendered":"\uff1cInside N.Korea\uff1e Expansion of the market economy as the driving force behind social transformation--based on sources from inside N.Korea. (PART5) State-owned houses sold in the markets as the housing market established. by ISHIMARU Jiro"},"content":{"rendered":"
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The apartment on the right side still has a pile of blocks and the construction of the outside wall has not completed. However, people have already started to live there. June 2008 in South Pyongan Province. Taken by Paek Hyang (ASIAPRESS)<\/p><\/div>\n

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2016\/Dec\/26<\/em><\/p>\n

4 Property transactions in the black markets
\n <\/strong><\/h2>\n

\u00a04-1 State-owned houses are often sold in the black markets
\n <\/strong><\/p>\n

In North Korea, the Party, the government organizations, and the state-owned factories need to provide workers with housings for free.\u00a0 Properties such as houses and lands do not belong to an individual since property rights do not exist.\u00a0 However, one has to pay money to get a house both in a city and a rural area since they are also a subject of market activities.<\/p>\n

As the state could not grant housing to workers because of a worsening housing situation, the black markets took the role of provider instead.\u00a0 This is the same phenomena as the emergence of the black markets when the food rationing system had stopped.
\n Related Article:\u00a0\uff1cInside N. Korea\uff1e Expansion of the market economy as the driving force behind social transformation\u2013based on sources from inside North Korea. (PART1)<\/a><\/span><\/strong><\/p>\n

It is widely known that land is owned by the state in North Korea.\u00a0 All the housing also belongs to the nation as well as the social cooperatives, such as collective farms. No one has his or her \u201cown\u201d house except a small number of those who owned homes built before 1958, mostly those built during Japanese occupation.\u00a0 Therefore, buying and selling, leasing, and mortgaging are all prohibited. [Note: In 1958, Kim Il-sung proclaimed that the socialistic reform of urban manufacturing industry and capitalistic commerce and industry had been completed.]\n

Since the baby boom in the late 1950s, after the Korean War, North Korea has suffered from chronic housing shortages.\u00a0 In the 1980s, at a time when the \u201cafter war generation\u201d had reached an age of marriage, the housing supply from the state could not catch up to an ever increasing number of the population.\u00a0 It was especially common, in the urban areas, for two families to share a house divided by a single curtain.<\/p>\n

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The phenomenon of two families staying in the same house was called \u201cliving together.\u201d It was very common. This is the entrance of a Tenement house called \u201charmonica\u201d near a city. August 2007 in Sariwon, North Hwanghae Province. Taken by Lee Joon(ASIAPRESS)<\/p><\/div>\n

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Since the beginning of arduous march in the 1990s, the housing issue has experienced a structural transformation.\u00a0 People in extreme poverty started to sell the houses as a last desperate choice for money.\u00a0 A number of deaths due to the impending starvation ironically created a \u201chousing supply.\u201d\u00a0 For those who were not severely affected by the arduous march, it was a great opportunity to move into a bigger and more convenient house.\u00a0 Currently in all parts of North Korea regardless of a city or a rural area, \u201cthe housing market\u201d is functioning.\u00a0 However, since the legal system has yet to change, it is still illegal to engage in the housing market.<\/p>\n

To live in a state-owned house one must be issued a \u201cGovernment Residence Permission Certificate,\u201d from the \u201cHousing arrangement Division\u201d under the Provisional People\u2019s Committee of North Korea, a local administration. People buy and sell their permissions; the transaction for the government certificate for the right to use a house takes place.\u00a0 Those who want to purchase or sell houses pay bribes to officials in the \u201cHousing arrangement Division\u201d and then change the user\u2019s name for the house.
\n Related Article:\u00a0\uff1cInside N. Korea\uff1e Market survey shows \u201cResolution 2270\u201d, the toughest-ever sanctions, didn\u2019t work<\/a><\/span><\/strong><\/p>\n

Even veterans and high ranking officials of the Party, the police, and the intelligence agency are not provided housing by the government when they move to new places.\u00a0 Those who want to buy a house need to \u201cpurchase\u201d a state-owned house via a \u201chousing transaction\u201d.<\/p>\n

In this transaction, illegal property agents called \u201cKogan-kun\u201d play the role of middleman, earning commission fees.\u00a0 They collect necessary information from buyers such as preferred layout, facilities, location, and price and competitively carry out their business.
\n Next page: 4-2 Housing prices...<\/strong><\/p>\n

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The ongoing construction of a five-story apartment. The outside walls are incomplete, and window frames are still not in place. October 2008 in Haeju City, South Hwanghae Province. Taken by Shim Ui-cheon (ASIAPRESS)<\/p><\/div>\n

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4-2 <\/strong>Housing prices <\/strong>
\n <\/strong><\/p>\n

How much is the actual price of a house now?\u00a0 Since no related statistic has been published, I will base it on information ASIAPRESS has obtained from inside North Korea.\u00a0<\/p>\n

In the end of the 1990s luxury apartments in both Pyongyang and other major cities were called \u201c10,000 dollars apartments.\u201d The expansion of the market economy awarded some people a tremendous amount of cash by being able to sell their homes, something impossible under the previous planned economy. Apartments continue to increase in price ever since.<\/p>\n

At the end of 2006, a resident in Chongjin City, the third biggest city, said in an interview, \u201cIn the case of a one-story house in an urban area, it should be near transportation and a market, have a stable power and water supply, and come with a large garden to cultivate vegetables and rear dogs or pigs.\u00a0 Tall apartments are not very attractive due to a lack of functioning elevators and a water supply because of an electricity shortage.\u00a0 In Chongjin City and Hamhung City, a single-story house with two rooms and a kitchen is sold at around 3,000 USD in the center of the city.\u201d<\/p>\n

Research Professor Jeong Eun-Yi, in the Institute for Social Science at the Gyeongsang National University in South Korea, conducted interviews with 20 North Korean defectors living in South Korea regarding the housing market.\u00a0 According to his research, the market prices for houses widely varied from 200 USD to 7,000 USD depending on location, the layout, and when they were built and sold on a market.\u00a0 Apartments in a big city, that are built for government officials, are expensive and the ones in rural areas were cheap.
\n Related Article:\u00a0[Video Report] National bus network of the North Korean market economy<\/a><\/span><\/strong><\/p>\n

In 2014, an ASIAPRESS partner living in Hoeryong City, North Hamkyung Province reported that, \u201cIn the countryside near Hoeryong City, an ordinary detached house occupying 231 square meters including a garden, could be priced at 20 million Won (around 2,500 USD).\u00a0 The market price of an apartment is almost the same.\u00a0 However, if there are flaws like inconvenient traffic in the location, incomplete infrastructure, the lack of a floor heating system, and the need for further construction, a 132 \u2013 165 square meter house can cost around 8 million Won.\u00a0 A clean single-story house in a rural area, far away from Hoeryong City that can accommodate two families with 165 square meters was 5 million Won.\u00a0\u00a0 A 231 square meter house near a market, although access is inconvenient due to being a long distance from a city, was sold at around 15 million Won.\u201d<\/p>\n[Note: As of early March 2013, 10,000 Won is equal to 1.25 USD based on my research.]\n

In housing transactions, USD and Chinese RMB are used in North Korea except rural areas where North Korean Won payment is sometimes used.
\n Nest page:4-3 4-3 Construction investments for businesses...<\/strong><\/p>\n

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The first and the second floor from the previous picture. The frames on the windows prevent theft. The apartment\u2019s owner intended to gain an return on investment as early as possible. October 2008 in Haeju City, South Hwanghae Province. Taken by Shim Ui-cheon (ASIAPRESS)<\/p><\/div>\n

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4-3 Construction investments for businesses
\n <\/strong><\/p>\n

As mentioned above, people called \u201cTonchu (lord of money)\u201d, the new entrepreneurs, have emerged as early as the 2000s.\u00a0 They are successful business people in the ever-expanding North Korean market. Their success was gained by usually taking advantage of the privileged, with corrupt high ranking officials and the people who surround them.\u00a0 Reportedly, they have started to individually or collectively build apartments in excellent locations since around 2005.<\/p>\n

Since it is not possible for an individual to claim the ownership of apartments, the Tonchu construct and register them in the name of the state. They then sell a \u201cpermission\u201d to those who want to purchase an apartment.\u00a0 They are state-owned buildings on the books, but are actually private property no different than that found in capitalistic markets.\u00a0 As of the summer in 2015, the prices of the luxury apartments increased; some of them are sold at around 200,000 USD in Pyongyang, and 30,000 \u2013 50,000 USD in rural areas.<\/p>\n

The marketization of state-owned housing can be a significant threat to the cornerstone of the North Korean-style socialist state.\u00a0 It has come about because the government has been unable to find a solution for the housing problem in the country, leaving the demands of the people in their own hands.\u00a0 The \u201cblack housing market\u201d emerged naturally out of the people\u2019s needs and has been carrying out the a role for housing transactions instead of the once relied upon state. [To be continued in part 6<\/a><\/span>]\n

\uff1cMarket Economy in N.Korea\uff1e View article sections<\/a><\/span><\/strong><\/p>\n

Reference List:<\/strong><\/p>\n

ASIAPRESS , \u201cRimjin-gang, edition-second\u201d, March 2010,<\/p>\n

Jeong Eun-Yi, \u300c\ubd81\ud55c\uc5d0\uc11c\uc758\uc8fc\ud0dd\uac00\uaca9\uacb0\uc815\uc694\uc778\uc5d0\uad00\ud55c\ubd84\uc11d\uff0d\ud568\uacbd\ubd81\ub3c4\ubb34\uc0b0\uc9c0\uc5ed\uc758\uc0ac\ub840\ub97c\uc911\uc2ec\uc73c\ub85c\u300d(Analysis regarding factors determining housing prices in North Korea\u2013the main focus in Musan County, North Hamkyung Province), The Northeast Asia Economic\u00a0 Association of Korea, \u201cThe Northeast Asia Economic Studies. Vol. 25. No.3\u201d, pp. 243 \u2013 pp. 277,July 2013.<\/p>\n

Jeong Eun-Yi,\u300c\ubd81\ud55c\ubd80\ub3d9\uc0b0\uc2dc\uc7a5\uc758\ubc1c\uc804\uc5d0\uad00\ud55c\ubd84\uc11d\uff0d\uc8fc\ud0dd\uc0ac\uc6a9\uad8c\uc758\ube44\ud569\ubc95\uc801\ub9e4\ub9e4\uc0ac\ub840\ub97c\uc911\uc2ec\uc73c\ub85c\uff0d\u300d(Analysis regarding the development of the property industry in North Korea\u2013the main focus is the illegal transaction of the \u201cpermission\u201d to use a house),The Northeast Asia Economic\u00a0 Association of Korea, \u201cThe Northeast Asia Economic Studies. Vol. 27. No.1\u201d, pp. 289 \u2013 pp. 328,March 2015.<\/p>\n

\u3010Related Article<\/strong>\u3011
\n \u25c6 Is Economic Sanction Really Effective? Searching Effect from Retail Price Index<\/a><\/span>
\n \u25c6 Delinquent Juveniles Mobilized For Forced Labor<\/a><\/span>
\n \u25c6 [Video Report] Back alley of Pyongyang: Never let foreigners go. Residents of central Pyongyang live on businesses in the market<\/a><\/span><\/p>\n

\"rimjingang_banner001\"*\u00a0<\/span><\/a>Editor\u2019s notes on North Korean reporters<\/a>
\n <\/a>ALL REPORTS >>><\/a> <\/strong><\/span>
\n ARCHIVE(pdf) >><\/a><\/span>
\n DPRK MAP >><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

  2016\/Dec\/26 4 Property transactions in the black markets \u00a04-1 State-owned houses are often sold in the black mark\u2026<\/p>\n","protected":false},"author":3,"featured_media":3568,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0},"categories":[12,13],"tags":[20],"_links":{"self":[{"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/posts\/2856"}],"collection":[{"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/comments?post=2856"}],"version-history":[{"count":0,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/posts\/2856\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/media\/3568"}],"wp:attachment":[{"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/media?parent=2856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/categories?post=2856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.02.asiapress.org\/rimjin-gang\/wp-json\/wp\/v2\/tags?post=2856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}