Peace talks ignite land buying frenzy along South Korea's fortified border

SEOUL, May 14 (Reuters) - Forget Seoul's posh Gangnam district.

With North Korea pledging to reduce tensions and renew ties with its southern neighbor, South Korea's hottest property market is now along the heavily fortified border between the two countries.

Demand for property in small towns and sparsely populated rural areas around the Demilitarised Zone (DMZ) is surging on expectations of an influx of people and investment.

Kang Sung-wook, a 37-year old dentist in the South Korean border city of Paju, has bought eight separate lots of land in and around the DMZ since mid-March.

Five were purchased without ever setting foot on them, using only Google Earth satellite photos and maps, as areas inside the DMZ cannot not be accessed by the public.

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Kim Jong Un and Moon Jae-In meet at DMZ
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Kim Jong Un and Moon Jae-In meet at DMZ
South Korean President Moon Jae-in and North Korean leader Kim Jong Un shake hands at the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters TPX IMAGES OF THE DAY
South Korean President Moon Jae-in and North Korean leader Kim Jong Un attend a welcoming ceremony in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters
South Korean President Moon Jae-in and North Korean leader Kim Jong Un meet in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters
People watch a TV showing a live broadcast of the inter-Korean summit, at a railway station in Seoul, South Korea, April 27, 2018. REUTERS/Jorge Silva
South Korean President Moon Jae-in and North Korean leader Kim Jong Un attend a welcoming ceremony in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters
South Korean President Moon Jae-in and North Korean leader Kim Jong Un meet in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters
People watch a TV showing a live broadcast of the inter-Korean summit, at a railway station in Seoul, South Korea, April 27, 2018. REUTERS/Jorge Silva
People wave the Korean unification flag during the inter-Korean summit, near the demilitarized zone separating the two Koreas, in Paju, South Korea, April 27, 2018. REUTERS/Kim Hong-ji
South Korean President Moon Jae-in and North Korean leader Kim Jong Un meet in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters
South Korean President Moon Jae-in and North Korean leader Kim Jong Un attend a welcoming ceremony in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters
Soldiers keep watch on the Grand Unification Bridge that leads to the Peace House, the venue for the Inter-Korean summit, near the demilitarized zone separating the two Koreas, in Paju, South Korea, April 27, 2018. REUTERS/Kim Hong-ji
People hold the Korean unification flag as they watch a news report on the inter-Korean summit, near the demilitarized zone separating the two Koreas, in Paju, South Korea, April 27, 2018. REUTERS/Kim Hong-ji
People watch a TV showing a live broadcast of the inter-Korean summit, at a railway station in Seoul, South Korea, April 27, 2018. REUTERS/Jorge Silva
South Korean President Moon Jae-in and North Korean leader Kim Jong Un attend a welcoming ceremony in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters
People watch a television news screen showing live footage of the inter-Korean summit between South Korea's President Moon Jae-in (on screen L) and North Korea's leader Kim Jong Un (on screen R) at a railway station in Seoul on April 27, 2018. - North Korean leader Kim Jong Un and the South's President Moon Jae-in shook hands on April 27 over the Military Demarcation Line that divides their countries in a gesture laden with symbolism ahead of a historic summit. (Photo by Jung Yeon-je / AFP) (Photo credit should read JUNG YEON-JE/AFP/Getty Images)
Vehicles carrying South Korean president Moon Jae-in approach a military check point on the Unification Bridge, linked to North Korea, near the demilitarized zone (DMZ) in Paju, South Korea, on Friday, April 27, 2018. Kim Jong Un�on Friday became the first North Korean leader to enter South Korea since the peninsula was divided almost seven decades ago as talks begin over dismantling his nuclear weapons program. Photographer: SeongJoon Cho/Bloomberg via Getty Images
Vehicles carrying South Korean president Moon Jae-in pass a military check point on the Unification Bridge, linked to North Korea, near the demilitarized zone (DMZ) in Paju, South Korea, on Friday, April 27, 2018. Kim Jong Un�on Friday became the first North Korean leader to enter South Korea since the peninsula was divided almost seven decades ago as talks begin over dismantling his nuclear weapons program. Photographer: SeongJoon Cho/Bloomberg via Getty Images
South Korean President Moon Jae-in (C) is greeted by his supporters as he leaves for the truce village of Panmunjom, near the presidential Blue House in Seoul on April 27, 2018 ahead of the inter-Korea summit. - North Korea's leader Kim Jong Un and the South's president Moon Jae-in will meet at the Military Demarcation Line that divides the peninsula before their summit on March 27, Seoul said, in an occasion laden with symbolism. (Photo by Jung Yeon-je / various sources / AFP) (Photo credit should read JUNG YEON-JE/AFP/Getty Images)
South Korean President Moon Jae-in (C) is greeted by his supporters as he leaves for the truce village of Panmunjom, near the presidential Blue House in Seoul on April 27, 2018 ahead of the inter-Korea summit. - North Korea's leader Kim Jong Un and the South's president Moon Jae-in will meet at the Military Demarcation Line that divides the peninsula before their summit on March 27, Seoul said, in an occasion laden with symbolism. (Photo by Jung Yeon-je / various sources / AFP) (Photo credit should read JUNG YEON-JE/AFP/Getty Images)
The motorcade carrying South Korean President Moon Jae-in passes through Seoul as he heads to a summit with North Korean leader Kim Jong Un on April 27, 2018. - North Korea's leader Kim Jong Un and the South's president Moon Jae-in will meet at the Military Demarcation Line that divides the peninsula before their summit on March 27, Seoul said, in an occasion laden with symbolism. (Photo by GREG BAKER / AFP) (Photo credit should read GREG BAKER/AFP/Getty Images)
South Korean President Moon Jae-in (C) is greeted by his supporters as he leaves for the truce village of Panmunjom, near the presidential Blue House in Seoul on April 27, 2018 ahead of the inter-Korea summit. - North Korea's leader Kim Jong Un and the South's president Moon Jae-in will meet at the Military Demarcation Line that divides the peninsula before their summit on March 27, Seoul said, in an occasion laden with symbolism. (Photo by Jung Yeon-je / various sources / AFP) (Photo credit should read JUNG YEON-JE/AFP/Getty Images)
South Korean President Moon Jae-in and North Korean leader Kim Jong Un meet in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters
South Korean President Moon Jae-in and North Korean leader Kim Jong Un meet in the truce village of Panmunjom inside the demilitarized zone separating the two Koreas, South Korea, April 27, 2018. Korea Summit Press Pool/Pool via Reuters TPX IMAGES OF THE DAY
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Kang said buying interest jumped so sharply as relations between the former foes improved that he needed to move fast.

"I was out looking since North Korea-U.S. summit news was announced in March, and it looked like all the good ones were gone already," said Kang. "I realized then that the market was on fire."

His investment along the border now totals 3 billion won ($2.8 million) for 49 acres (20 hectares) of land.

RAZOR WIRE AND RESTRICTIONS

For decades, the DMZ has been a different kind of hot spot, the scene of sometimes deadly military provocations and daring defections from the North.

The zone, dotted with guard posts and strung with razor wire, was established after the 1950-1953 Korean War. The two Koreas still don't officially recognize each other and remain in a technical state of war because the conflict ended in a truce, not a peace agreement.

Over a million landmines were laid in border areas including the DMZ and the Civilian Control Zone in the South, said Jeong In-cheol, a landmine expert at National Park Conservation Network.

But while public access is restricted, land within the 2km (1.2 mile) wide South Korean side of the DMZ and other border areas can still be purchased and registered.

Land transactions in Paju, gateway to the United Nations truce village of Panmunjom, more than doubled in March to 4,628 from February, government data shows. That far outstripped better known markets such as trendy Gangnam, where volumes were up just 9 percent.

In the settlement of Jangdan-myun, home to Dorasan Station - the last railway stop south of the border - transaction volumes surged four-fold from a year earlier. Land prices there rose 17 percent over the same period.

Kim Yoon-sik, a realtor with 25 years experience in Paju, says owners of the land in the DMZ include those who inherited farmland from ancestors in pre-Korean war days and some long term investors.

"With bids outnumbering offers, I often see sellers canceling on preliminary contracts, it's that hot," Kim said.

RAILWAYS AND CONSTRUCTION

The surge of activity along the border is not limited to South Korea or just real estate.

In the northeastern Chinese border city of Dandong, property investors are pushing up prices and even spurring buying interest inside North Korea.

At last month's historic inter-Korean summit at Panmunjom, North Korean leader Kim Jong Un and South Korean President Moon Jae-in pledged to reconnect railways and roads along the border, and transform the DMZ into a "peace zone."

China and South Korea have also agreed that if North Korea undertakes complete denuclearisation, it should be guaranteed economic aid. That could start with railway projects connecting China and South Korea through North Korea.

Shares of South Korea's construction and railway firms such as Hyundai Rotem and Seoam Machinery Industry Co have soared on hopes of such projects.

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President Trump's attempted DMZ visit
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President Trump's attempted DMZ visit
White House senior staff discuss the situation as U.S. President Donald Trump sits in his car after being grounded from an attempt to visit the Demilitarized Zone (DMZ) in the truce village of Panmunjom dividing North Korea and South Korea, at a U.S. military post in Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
U.S. Secret Service counter-assault team members travel by helicopter in the fog alongside President Donald Trump's helicopter in a failed attempt to visit Observation Post Ouellette along the Demilitarized Zone (DMZ) in the truce village of Panmunjom dividing the two countries outside Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
In a borrowed U.S. Army jacket to keep warm, White House Press Secretary Sarah Huckabee Sanders updates reporters on President Donald Trump's failed attempt, preempted by weather, to visit Observation Post Ouellette along the Demilitarized Zone (DMZ) in the truce village of Panmunjom dividing North Korea and South Korea outside Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
U.S. Secret Service counter-assault team members load up to travel by helicopter in the fog alongside President Donald Trump's helicopter in a failed attempt to visit Observation Post Ouellette along the Demilitarized Zone (DMZ) in the truce village of Panmunjom dividing the two countries outside Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
White House senior staff discuss the situation as U.S. President Donald Trump sits in his car after being grounded from an attempt to visit the Demilitarized Zone (DMZ) via helicopter to the truce village of Panmunjom dividing North Korea and South Korea, at a U.S. military post in Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump sits in his car after being grounded from an attempt to visit the Demilitarized Zone (DMZ) in the truce village of Panmunjom dividing North Korea and South Korea, at a U.S. military post in Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
White House Chief of Staff John Kelly (looking at notes) huddles with White House senior staff to discuss the situation as U.S. President Donald Trump sits in his car after being grounded from an attempt to visit the Demilitarized Zone (DMZ) in the truce village of Panmunjom dividing North Korea and South Korea, at a U.S. military post in Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
White House senior staff discuss the situation as U.S. President Donald Trump sits in his car after being grounded from an attempt to visit the Demilitarized Zone (DMZ) in the truce village of Panmunjom dividing North Korea and South Korea, at a U.S. military post in Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
U.S. President Donald Trump sits in his car after being grounded from an attempt to visit the Demilitarized Zone (DMZ) in the truce village of Panmunjom dividing North Korea and South Korea, at a U.S. military post in Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
White House senior staff discuss the situation as U.S. President Donald Trump sits in his car after being grounded from an attempt to visit the Demilitarized Zone (DMZ) in the truce village of Panmunjom dividing North Korea and South Korea, at a U.S. military post in Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
White House senior staff discuss the situation as U.S. President Donald Trump sits in his car after being grounded from an attempt to visit the Demilitarized Zone (DMZ) via helicopter to the truce village of Panmunjom dividing North Korea and South Korea, at a U.S. military post in Seoul, South Korea, November 8, 2017. REUTERS/Jonathan Ernst
White House press secretary Sarah Huckabee Sanders speaks to reporters after presidential helicopters returned US President Donald Trump to US Army Garrison Yongsan in Seoul, South Korea on November 8, 2017, due to bad weather just before they arrived for a vist to the Demilitarized Zone (DMZ). / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
US President Donald Trump waits next to helicopters as US Army Garrison Yongsan in Seoul, South Korea on November 8, 2017, waiting for bad weather to clear so they can try and make a second attempt to fly to the Demilitarized Zone (DMZ). US President Donald Trump was forced to abandon an attempted surprise visit to the Demilitarized Zone that divides the two Koreas due to bad weather, a pool report said.The US head of state, who the White House had previously said would not go to the symbolic spot, left his hotel in Seoul early in the morning and went to the Yongsan military base in the city, but a helicopter flight to the DMZ had to be called off due to weather conditions. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
A member of the helicopter squadron accompanying US President Donald Trump looks on as they attempt to fly to the Demilitarized Zone (DMZ) over Seoul, South Korea on November 8, 2017. The crew was forced to turn around before landing due to bad weather. US President Donald Trump was forced to abandon an attempted surprise visit to the Demilitarized Zone that divides the two Koreas due to bad weather, a pool report said.The US head of state, who the White House had previously said would not go to the symbolic spot, left his hotel in Seoul early in the morning and went to the Yongsan military base in the city, but a helicopter flight to the DMZ had to be called off due to weather conditions. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
Secret Service counter-assault team members, accompanying US President Donald Trump in another helicopter, board a helicopter as they attempt to fly to the Demilitarized Zone (DMZ) over Seoul, South Korea on November 8, 2017. The crew was forced to turn around before landing due to bad weather. US President Donald Trump was forced to abandon an attempted surprise visit to the Demilitarized Zone that divides the two Koreas due to bad weather, a pool report said. The US head of state, who the White House had previously said would not go to the symbolic spot, left his hotel in Seoul early in the morning and went to the Yongsan military base in the city, but a helicopter flight to the DMZ had to be called off due to weather conditions. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
Secret Service counter-assault team members, accompanying US President Donald Trump in another helicopter, prepare to board a helicopter as they attempt to fly to the Demilitarized Zone (DMZ) over Seoul, South Korea on November 8, 2017. The crew was forced to turn around before landing due to bad weather. US President Donald Trump was forced to abandon an attempted surprise visit to the Demilitarized Zone that divides the two Koreas due to bad weather, a pool report said. The US head of state, who the White House had previously said would not go to the symbolic spot, left his hotel in Seoul early in the morning and went to the Yongsan military base in the city, but a helicopter flight to the DMZ had to be called off due to weather conditions. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
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FALSE DAWN?

But South Korea has seen this kind of excitement before.

Border property prices spiked when former President Roh Moo-hyun met with North Korea's Kim Jong Il in 2007. Prices then plummeted as ties deteriorated when the right-wing government of Lee Myung-bak took power a year later.

"For the past seven decades, the two Koreas have taken radically different paths," said Jhe Seong-ho, a law school professor at Seoul's Chung Ang University. "Deregulating of the border zones won't be a quick and smooth process even if there is an economic opening up of North Korea."

Much of the land within the DMZ is likely to remain restricted from any development for conservation purposes, a huge risk for investors, he added.

Hopes are high, however, with Kim set to meet U.S. President Donald Trump in Singapore next month after his recent summit with Moon and two trips to China to meet President Xi Jinping.

"I have a firm belief that this time North Korea would pursue an open economy like Vietnam," Kang said. "Kim Jong Un wouldn't go everywhere and visit China twice if he was bluffing." (Reporting by Joori Roh and Cynthia Kim. Editing by Lincoln Feast.)

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