New high-rise apartment buildings in North Korea constructed with Chinese building materials are causing a major shift in the North Korean real estate market, RFA has learned.
In the past, prospective home buyers would shy away from living in buildings more than three-stories, because frequent blackouts and low water pressure would make living on higher floors inconvenient.
But the new buildings are constructed with generators and more-modern plumbing, so living on the higher floors of these buildings has become desirable.
But many of the imported materials are illegal under U.N. economic sanctions adopted to pinch the flow of cash North Korea can devote to building nuclear weapons and missiles. Sources say that they are being smuggled into the country across the Yalu, as the new apartments are making huge profit margins for developers.
One such apartment building in Chongjin, North Hamgyong province has residents clamoring to get in.
“These days, residents are paying keen attention to the newly completed high-rise apartment building in Chongjin,” said a resident of North Hamgyong in an interview with RFA’s Korean Source Monday.
“In the past, residents wanted to live in low-rise apartments, or on the lower floors of high-rises, but now they want to move into [any floor] of these new high-rises because they know that Chinese building materials are being used,” the source said.
The source said that Chongjin has had a high-rise construction boom recently.
“At the end of last year, several high-rises with more than 20 floors were completed in the Pohang and Sunam districts of Chongjin,” said the source.
“[They] are equipped with their own power generators, so water pumps and elevators are working 24/7. The heating systems are also up-to-date so people are noticing,” the source said.
“[They] are located in the city center and have good [access to public] transportation and [scenic] views,” the source said.
“Besides just the power generators, elevators and water pumps, the interior is decorated with high-end Chinese materials. People are envious of those who can live there,” the source said.
The new apartment buildings are a huge improvement over older buildings, according to the source.
The source said that when electricity was out, people living on floors higher than the third floor had it rough, because tap water “can’t reach the higher floors due to low water pressure.”
“People living in higher floors had to go down to the ground floor to get water. They also had to carry food, firewood and other necessities to the higher floors [using the stairs],” the source said.
“So only the poor used to live in the higher floors,” the source said.
“Not only did the newly built high-rise apartments solve most of these problems with their own generators and modern equipment, they also use Chinese luxury fixtures, inducing doors, kitchen sinks, bathrooms, and even the wallpaper and flooring,” the source said.
But people suspect that the building materials have been smuggled into North Korea.
“[They] wonder how such materials have been brought into the country from China, since both machinery and metal products are banned under the U.N. sanctions,” the source said.
Another North Hamgyong resident told RFA that people have become suspicious of the builders.
“The apartment [in Chongjin] has been constructed with up-to-date equipment with Chinese materials so the people wonder how these materials have been brought in, and with what money,” said the second source.
The second source spoke of residents all but abandoning older buildings now that the newer ones are around.
“An [old] 15-story apartment building in Ranam district is now an empty ghost building because people are reluctant to move in. But people with money are rushing to get a spot in a new high-rise apartment building these days,” said the second source.
In a country where the average monthly salary supplied by the communist government amounts to less than U.S. $5.00 these newer apartment buildings are far from affordable to most people.
“An apartment in a new high-rise in Rason City are traded between 100,000 and 200,000 Chinese yuan ($14,383.11 – $28,766.22), depending on their size,” said the second source.
“Since they know there will be no problems with tap water or elevators, the price is really high,” the second source added.
But in North Korea, people are legally not allowed to buy and sell property, nor are they allowed to build apartments to sell.
“But these high-rises continue to be built,” said the second source.
“Private sales are possible after construction has been completed because government agencies are [behind the building boom]. They recruit private investors and arrange to buy the expensive Chinese materials which are prohibited items.”
RFA attempted to contact the U.N. Security Council’s Sanctions Committee on North Korea, but received no reply as of Thursday.
Reported by Jieun Kim for RFA’s Korean Service. Translated by Leejin Jun. Written in English by Eugene Whong.