Photo/IllutrationHigh-rise apartment buildings line the Yalu river in Dandong, Liaoning province, in northeastern China on May 21. (Takuya Hiraga)

  • Photo/Illustraion

DANDONG, China--Kim Jong Un’s visit to China in March has sparked such a real estate boom in two once-stagnating cities bordering North Korea that agents and government officials are struggling to keep pace.

Investors are gobbling up properties in Dandong, Liaoning province, and Hunchun, Jilin province, on expectations that the two countries will revitalize their economic exchanges.

“Are you talking about prices of apartment rooms?” a harried real estate agent in Dandong said in a telephone interview with The Asahi Shimbun in mid-May. “During this phone conversation right now, the price will go up.”

The Dandong city government has re-energizing efforts to develop the “Dandong new zone” located about 10 kilometers south of the city center to deal with a surge in demand for apartments since April.

The real estate agent compared Dandong with Shenzhen in Guangdong province, which became a thriving city under China’s economic reforms.

“Dandong will be the ‘second Shenzhen,’” the agent said.

An estimated 70 percent of goods traded between China and North Korea go through Dandong.

In 2011, construction started on a bridge on the Chinese side of the Yalu river to provide a direct route to Sinuiju in North Korea. The Dandong government also built many apartment buildings in the Dandong new zone.

However, relations deteriorated, and the opening of the bridge was delayed. Trade further shrank after the United Nations tightened sanctions against Pyongyang over its nuclear and ballistic missile tests.

Units in the apartment buildings remained unsold, and the area was called a “ghost town.”

But apartment prices started soaring after Kim’s visit.

About 1,000 homes currently exist in newly built apartment buildings along the Yalu river. They each cost about 8,000 yuan (about $130,000 yen or $1,176) per 1 square meter, double the price before Kim’s trip to China, according to real estate agents.

Some customers buy more than 10 rooms at a time, they said.

Local government service counters have been handling around 260 real estate transactions daily on weekdays, so weekend counters were made available starting in May.

The real estate boom has also reached Hunchun, and customers there include investors from Singapore and South Korea, according to Chinese media reports.

The two border cities are attractive to investors because they are not subject to restrictions on real estate purchases that are imposed in big cities, such as Beijing and Shanghai.

However, demand has been so strong that the two local governments in May announced their own restrictions, including banning outside investors from reselling the properties for a certain period.

According to statistics released on May 23 by China’s General Administration of Customs, the total amount of trade between China and North Korea was $170 million in April, a decrease of about 60 percent from the same month the previous year.

But trade has been revived, if the increasing number of trucks crossing the border is any indication. And real estate prices are expected to continue rising.