South Korea Construction Industry Databook 2025 | Smart Cities, Green Buildings and Public Housing Drive Growth in South Korea's Construction Sector - ResearchAndMarkets.com

The "South Korea Construction Industry Databook Series - Market Size & Forecast by Value and Volume, Q1 2025" report has been added to ResearchAndMarkets.com's offering.

The construction market in South Korea is expected to grow by 3.5% on annual basis to reach KRW 119.24 trillion in 2025. South Korea's construction market experienced robust growth during 2020-2024, achieving a CAGR of 6.5%. This upward trajectory is expected to continue, with the market forecast to grow at a CAGR of 2.8% during 2025-2029. By the end of 2029, the construction sector is projected to expand from its 2024 value of KRW 115.17 trillion to approximately KRW 137.84 trillion.

This report provides a detailed data-centric analysis of the construction sector in South Korea, offering a comprehensive view of market opportunities in the building and infrastructure construction industry at the country level. With over 100+ KPIs covering growth dynamics in building and infrastructure construction, construction cost structure analysis, and analysis by key cities in the country, this databook provides a wealth of data-centric analysis with charts and tables, ensuring stakeholders are fully informed.

It offers a comprehensive analysis of market dynamics in the construction sector through a range of KPIs such as value, volume, and number of units. The building construction covers detailed segmentation over 30+ segments in residential, commercial, industrial, and institutional sectors.

Key Insights

South Korea Residential Construction Industry

The South Korean residential construction industry presents opportunities through government-led housing projects and a focus on sustainable building practices. However, challenges persist, including rising construction costs, high unsold housing inventory, and labor shortages. To navigate the current landscape, stakeholders should align with government initiatives, invest in sustainable construction technologies, and address workforce skill gaps. Collaborative efforts between the public and private sectors are essential to revitalizing the industry and effectively meeting housing demands.

Project Landscape

• The government's initiative to build 252,000 public housing units is an upcoming project to increase housing availability. This plan includes promoting 140,000 units for permits, adding 5,000 units to the initial plan.
• While the public sector is leading large-scale housing projects, there is an emphasis on public-private partnerships to leverage private investment and expertise. The government's support package of KRW 26 trillion (USD 19.8 billion) for the semiconductor industry is expected to stimulate related residential construction activities.

Government Policies & Programs

• In January 2024, President Yoon Suk Yeol announced plans to relax tax rules for multiple homeowners and ease regulations on apartment reconstruction to boost housing supply and curb rising costs.
• The government is implementing measures to stabilize the housing market, including purchasing unsold dwellings through the Korea Land and Housing Corporation (LH) to address market stagnation.
• While federal initiatives focus on nationwide housing policies and financial support, local governments are encouraged to implement region-specific programs to address unique housing challenges, such as urban regeneration projects and affordable housing schemes.

Industry-Specific Developments

• The adoption of zero-energy building (ZEB) standards is gaining momentum. Starting in 2024, mandatory requirements will apply to all public buildings. This move aims to enhance energy efficiency and sustainability in residential construction.
• There is a growing emphasis on eco-friendly construction practices, including using sustainable materials and energy-efficient designs to meet stricter environmental regulations and cater to the increasing demand for green buildings.
• The industry is experiencing a shortage of skilled labor, particularly in specialized areas such as green construction technologies and sustainable building practices. This gap necessitates investment in training programs to equip workers with the necessary skills.

South Korea Commercial Construction Industry

South Korea's commercial construction sector opportunities lie in smart city developments, green building initiatives, and the growing demand for high-tech office spaces. However, rising costs, regulatory challenges, and shifting work trends pose risks. To remain competitive, investors should focus on sustainable and tech-enabled commercial projects. Policymakers must streamline regulatory approvals, while developers should explore flexible office and mixed-use concepts to adapt to evolving market demands.

Project Landscape

• Several major commercial projects are underway, including the Seoul Smart City Initiative, which integrates smart infrastructure into new commercial hubs. Upcoming developments focus on high-tech business districts and retail spaces integrated with entertainment and hospitality.
• Private developers lead commercial real estate projects, and there is increasing interest in public-private partnerships (PPPs) for large-scale developments. The government is supporting infrastructure improvements in commercial zones to boost business activity.
• While investments remain cautious due to market uncertainties, foreign direct investment (FDI) in commercial real estate is expected to grow, particularly in the premium office space and retail sectors. Tech-driven developments are attracting significant capital.

Industry-Specific Developments

• Adopting AI-powered building management systems and IoT-integrated office spaces is reshaping commercial construction. Smart offices with automated lighting, climate control, and security systems are becoming the standard.
• The government's push for net-zero carbon buildings influences commercial construction, with major developers incorporating solar panels, energy-efficient glass facades, and waste recycling systems.
• The demand for skilled professionals in digital construction, sustainable design, and project management is rising. Labor shortages in specialized trades continue to be challenging, requiring further investment in workforce training.

South Korea Institutional Construction Industry

The institutional construction sector in South Korea presents opportunities in smart hospitals, green public buildings, and digital education facilities. However, funding limitations, regulatory compliance, and workforce shortages remain key challenges. Policymakers should prioritize efficient fund allocation and streamlined approval processes to accelerate institutional projects. Investors and developers should focus on smart and sustainable infrastructure to align with government goals and market demand.

Project Landscape

• The Seoul Medical Mega Hub Project is a key initiative to enhance healthcare infrastructure, aiming to create advanced medical facilities. Upcoming projects include new university campuses and research institutions integrating digital learning tools and sustainability features.
• Institutional construction is predominantly government-funded, but private-sector participation is increasing, especially in hospital and university developments. To accelerate the execution of large-scale projects, public-private partnerships (PPPs) are being encouraged.
• The government has increased healthcare and education infrastructure funding, with investments focused on upgrading existing facilities and constructing new ones. However, funding constraints remain challenging, leading to selective prioritization of high-impact projects.

South Korea Industrial Construction Industry

Industrial construction in South Korea offers significant growth potential in high-tech manufacturing, logistics, and sustainable industrial zones. However, land constraints, rising costs, and regulatory compliance remain key challenges. Investors should focus on smart industrial facilities and sustainable construction projects to align with government incentives. Policymakers must ensure efficient land-use planning and regulatory flexibility to sustain industrial growth. Companies should prioritize workforce training and technological adoption to remain competitive in the evolving industrial landscape.

Project Landscape

• Major industrial projects include expanding semiconductor fabrication plants, with companies like Samsung and SK Hynix investing heavily in manufacturing facilities. Logistics hubs near major ports and airports are also being developed to enhance supply chain efficiency.
• The private sector is the primary driver of industrial construction, with significant investments from tech and manufacturing giants. The government is providing strategic incentives to support the development of industrial zones and advanced manufacturing hubs.
• Despite economic uncertainties, investment in industrial construction remains strong, especially in semiconductor and battery manufacturing. The government's KRW 26 trillion (USD 19.8 billion) support package for semiconductor and high-tech industries is expected to sustain growth.

South Korea Infrastructure Construction Industry

The South Korean infrastructure sector presents significant opportunities in smart cities, high-speed transport, and renewable energy projects. However, rising costs, regulatory hurdles, and funding limitations are key obstacles that must be addressed. To capitalize on infrastructure opportunities, stakeholders should invest in smart technology, align with government sustainability goals, and explore public-private partnerships. Policymakers should focus on streamlining project approvals and securing long-term funding to ensure continued infrastructure expansion.

Project Landscape

• Major infrastructure projects include the construction of the Great Train Express (GTX) network and the expansion of the high-speed rail system to ease congestion in metropolitan areas. The government is also developing offshore wind farms and hydrogen energy hubs as part of its renewable energy strategy.
• While the public sector leads most infrastructure projects, private sector involvement is growing, particularly in public-private partnerships (PPPs) for transportation and energy infrastructure. Large corporations are investing in smart city developments and urban mobility solutions.
• The government has allocated KRW 52 trillion (USD 39.5 billion) for infrastructure projects in 2024, focusing on renewable energy, smart transportation, and urban resilience. Despite strong investments, funding limitations and rising costs pose financial risks to long-term infrastructure expansion.

Report Scope

This report provides market size and forecast across 40+ construction segments for ten years from 2020 - 2029 in South Korea.

KPIs covered include the following:

• Market size by value
• Market size by volume of construction
• Number of units
• South Korea Economic Indicators
• South Korea Top Cities Construction Data
• South Korea Residential Building Construction Coverage
• South Korea Residential Green Building Construction Coverage
• South Korea Commercial Building Construction Coverage
• South Korea Commercial Green Building Construction Coverage
• South Korea Industrial Green Building Construction Coverage
• South Korea Institutional Building Construction Coverage
• South Korea Institutional Green Building Construction Coverage
• South Korea Infrastructure Construction Sectors
• South Korea Green Infrastructure Construction
• South Korea Construction Cost Structure Analysis

For more information about this report visit https://www.researchandmarkets.com/r/v3fjks

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