North Korea Experimenting with Private Home Ownership

via Radio Free Asia

via Radio Free Asia

Image Attribute: A street in Rason SEZ

Image Attribute: A street in Rason SEZ 

According to latest Radio Free Asia (RFA) report, North Korea is experimenting with private real estate ownership in the city of Rason, part of a special economic zone (SEZ) located in the country’s northeastern corner near China and Russia. The Rason SEZ is administered by the Committee of External Economic Cooperation (CEEC). Foreign companies must be invited by the CPEEC to participate in the special zone. In 2004, Rason was reabsorbed back into the North Hamgyong province, and since 2010 Rason is again a "Directly Governed City".

As per the constitution, the North Korean regime forbids its citizens to privately own land-based property. Technically, the state owns it, as well as any products created from the land's use (as stated in the constitution). The government assigns individuals where to live and issues the right to a home for a certain period, instead of granting private ownership.

According to a report by United Press International (UPI), an increasing number of individuals are purchasing and selling the rights for property use to others, a sign of expanding private ownership, according to Joung Eun-lee, research fellow of the Korea Institute for National Unification. The rights to living spaces were being bought and sold as a loophole around this technicality. 

RFA sources report that the government is trying out a de jure private ownership system in Rason. It will price state-owned houses and sell them to their current residents.

A source in North Hamgyong province said in an interview with RFA’s Korean Service on March 19 - “[The city] recently announced the requirements for home buyers to take ownership of their state-owned houses. [The country] is planning to privatize ownership of houses and people are really interested in this.” He further added, "According to an announcement [by the city government], they will set a value for each house and if residents make payments, [the city] will give them the ownership of their house.”

The benefit of ownership will not be restricted only to those with the cash flow to purchase a home outright. The government wants to make ownership more widely available. Besides that, legitimate home ownership may be cheaper than the de facto system in place. Under the new plan, there will still be limits on ownership. Buyers will not be able to purchase more than one home. Regardless of the restrictions, Rason residents are quite enthusiastic about the idea of owning a home.

“[Buyers] can make a payment in full, or they can make monthly payments for up to 25 years,” the source said, adding,“The value of houses is dependent upon location and convenience in the surrounding area, access to transportation, year built and [amount of living space].”

The source was able to estimate the approximate value of the city’s homes, saying, “It is about US$ 1-5 per square meter. There are cheaper homes in suburban areas that will go for as low as 300 Chinese Yuan (US$ 44.71). But downtown apartments will cost more than US$ 5,000.” He further added, “There are people who would want to pay that amount to become homeowners.”

According to the second source from Rason, “Ever since the city administration committee announced the new system, the housing market has been on fire!” He further added, “The rich and high ranking government officials are all busy getting ready to buy their houses. Once they pay for the house [it will be theirs], so they are all doing their best to find ways to buy their house.” 

If the experiment proves successful, the source expects a real estate craze to sweep the entire country.

This article is a derivative of an original work published at Radio Free Asia (RFA).

Copyright © 1998-2019, RFA. Used with the permission of Radio Free Asia, 2025 M St. NW, Suite 300, Washington DC 20036.
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IndraStra Global: North Korea Experimenting with Private Home Ownership
North Korea Experimenting with Private Home Ownership
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