(Zero Hedge) – Welcome to the demilitarized zone between North and South Korea, where real estate prices are reportedly skyrocketing as peace-profiteering makes an outsized bet that the unlikely trio of Donald Trump, Kim Jung-un and Dennis Rodman will end the nuclear threat and render the DMZ the place to be.
From February to March this year, land deals in Paju more than doubled, according to South Korean government data cited by Reuters, and it’s enough to outshine the trendy Seoul neighborhoods, like Gangnam.
Paju, located at the 38th parallel and right on the border with North Korea and the home of a strategic South Korean military base, is considered the gateway to the United Nations’ ‘truce’ village of Panmunjom—and then to North Korea itself.
And it’s turning into a major tourist attraction, land mines and all.
From Paju, visitors can hit up the Dora Observatory and view North Korea from binoculars. But while now it’s just a game of peeping Tom, if peace descends on the region, Paju may end up being the hub for a new, much more hands on type of tourism. At least that’s what investors are betting on.
Past bundles of razor wire, reinforced fences, and guard posts, can be made out the cluster of gray, blue and salmon buildings which make up the Kaesong Industrial Complex.
According to the Wall Street Journal, while farmland in the DMZ could be found for about $2/square foot back in February, in May it was already over $5/square foot, in some places, and $13 in others.
Now, with many believing that peace is just around the corner, the DMZ is experiencing a run on property, with a property agent in Munsan near the border who noted that even properties “riddled with landmines” had risen 100 percent.
Reuters cited a South Korean dentist near Paju who has acquired eight separate lots just since mid-March, bringing his total DMZ investment to 49 acres worth an estimated $2.8 million. And he bought them without seeing them.
But real estate sales can be fickle, with on-again-off-again. When Trump cancelled the June 12 summit earlier this month, no one moved on real estate, but when it was reinstated only days later, the run on real estate renewed.
And the DMZ between North and South isn’t the only swathe of land that’s on investor radar right now.
Real estate prices in the Chinese town of Dandong, on the border with North Korea, saw a 2-percent jump in prices from March to April, according to Quartz, citing Chinese official data.
New property sales in the town are almost double what they were a year ago, outperforming China’s biggest cities.
Investors are likely hoping that all hope does not rest solely on Trump, Kim and Rodman.
Indeed, there have been other signs of potential peace, as well.
In May, those interested in the potential real estate bonanza perked their ears up when South Korean Hyundai said it was considering relaunching projects in North Korea and was in the process of setting up a task force to that end.
There are also signs that North Korea could be ready to consider liberalizing a bit and loosening its stranglehold over business, including reports suggesting that some reformist politicians have arisen under Kim. Chief among them is said to be Pak Pong Ju, former North Korean premier, now responsible for the economy.
In the meantime, the real estate push is a gamble, but if peace does eventually come out of the Singapore summit or, more likely, efforts by South Korea and pure desperation on the part of Pyongyang, investors who got to the DMZ first could be sitting on a very nice profit margin.