"Remodeling Market to Grow from 30 Trillion Won in 2020 to 44 Trillion Won by 2030"

Maintenance and Repair Market and Remodeling Market Grow Annually by 1.4% and 5.4% Respectively
Demand Expected to Increase for Extending Building Lifespan and Reducing Maintenance Costs
Housing Welfare Perspective Calls for Active Housing Remodeling, but Apartment Remodeling Performance Remains Low

[Asia Economy Reporter Yuri Kim] This year, the domestic remodeling market, including 'repairs' and 'maintenance,' is expected to reach around 30 trillion KRW. The domestic remodeling market is gradually growing, with projections estimating it will reach 37 trillion KRW by 2025 and 44 trillion KRW by 2030.

The Korea Construction Industry Research Institute forecasted this in its report titled 'Prospects and Policy Tasks for the Building Remodeling Market' released on the 16th. Specifically, the building maintenance market size was estimated at 12.795 trillion KRW in 2020, 13.759 trillion KRW in 2025, and 14.723 trillion KRW in 2030.

Researcher Yongseok Park from the Construction Industry Research Institute said, "From 2000 to 2017, the construction market was primarily driven by new construction," adding, "The building maintenance market experienced negative or low growth over the past 17 years but has significant potential for activation in the mid to long term." He explained, "Buildings constructed between 1990 and 2010 are gradually aging, but they are not immediately facing reconstruction or full remodeling (repairs). In the current economic downturn caused by the spread of COVID-19, demand is expected to increase for replacing essential machinery and equipment or repairing and fixing aging parts to extend the lifespan and reduce maintenance costs of existing buildings rather than reconstruction or full remodeling."

The building remodeling market was estimated at 17.293 trillion KRW in 2020, 23.321 trillion KRW in 2025, and 29.35 trillion KRW in 2030. Although the building remodeling market showed irregular growth trends from 2002 to 2019, it is expected to grow rapidly in the future. Researcher Park stated, "As of the end of 2018, buildings over 30 years old accounted for 37.1% of all buildings," adding, "While a significant portion of aging buildings will be reconstructed, considering advances in remodeling technology, government policies promoting remodeling, and improved public awareness of remodeling, the activation of building remodeling is expected going forward."

The main segment of the building remodeling market is non-residential buildings. Examining the internal composition of the remodeling market from 2002 to 2019, non-residential buildings accounted for an average of 95%, while residential buildings accounted for 5%. The floor area of non-residential remodeling construction increased from 12.92 million square meters in 2002 to 19.61 million square meters in 2019, growing at an average annual rate of 2.48% over 17 years. Remodeling to convert non-residential buildings to other uses or to expand existing facilities increased. In contrast, the floor area of residential remodeling construction decreased from 1.04 million square meters in 2002 to 0.64 million square meters in 2019, declining at an average annual rate of 2.8% over 17 years. Residential remodeling mostly consists of small-scale projects centered on detached houses, which have a simple decision-making structure for remodeling implementation and the advantage of immediately reflecting the actual housing needs of homeowners.

Although the government has implemented 'remodeling activation' policies to optimize resource use and save energy, the building maintenance market has shrunk, and the building remodeling market has experienced cycles of growth and contraction. The government's primary focus has been on activating remodeling of apartment complexes due to aging. Despite various policies being promoted, the performance of residential remodeling initiatives has been very low.

Looking at the construction status of apartment remodeling, it showed an irregular pattern, decreasing from about 100,000 square meters in 2010 to 60,000 square meters in 2015, then increasing to 160,000 square meters in 2019. The share of apartment remodeling in the total remodeling construction area was only 0.8% in 2019. Researcher Park explained, "Although social interest in remodeling aging apartment complexes is high, related regulations are continuously tightening, making actual activation difficult," adding, "Policy efforts are needed from a housing welfare perspective, including remodeling of apartment complexes, improvement of aging detached houses in underdeveloped areas, and housing supply through remodeling for change of use."

This content was produced with the assistance of AI translation services.