The construction market in South Korea is expected to grow by 3.5% on annual basis to reach KRW 119.24 trillion in 2025.
The construction market in the country 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.
The research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.
The construction market in the country 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.
The research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.
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.Macroeconomic Factors
- The South Korean residential construction sector faces significant challenges due to rising construction costs and inflation. This downturn is attributed to increased material prices, high interest rates, and a decline in building permits.
- Despite the overall contraction, the government is making a notable push to increase the housing supply. In December 2024, the government announced plans to construct 252,000 public housing units to address the housing shortage and stabilize the market.
- The industry faces challenges such as many unsold homes, with 617,904 units remaining from January to September 2024, reflecting a 0.6% year-on-year increase. Additionally, the financial strain on construction companies has led to an increase in bankruptcies, with 26 firms declaring bankruptcy in the first ten months of 202
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.Macroeconomic Factors
- Rising construction costs in South Korea’s commercial sector are a major concern. These costs are driven by high material prices, increasing labor wages, and inflationary pressures. These factors have led to tighter investment conditions, affecting new developments and renovation projects.
- Demand for office spaces and mixed-use developments is rising, particularly in Seoul and Busan, as companies look for modern, sustainable office spaces. The shift toward flexible workspaces and high-tech commercial buildings shapes new construction projects.
- The commercial sector faces challenges such as high vacancy rates in older office buildings due to changing work patterns and the rise of remote work. Additionally, regulatory hurdles and lengthy approval processes for new developments slow market expansion.
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.
Government Policies & Programs
- Policies supporting urban regeneration and smart city developments are driving commercial construction growth. The government is incentivizing green and smart building projects to modernize commercial infrastructure.
- Developers can take advantage of tax benefits and financial incentives to invest in eco-friendly and energy-efficient commercial properties. The government is also easing zoning restrictions to encourage mixed-use developments.
- Federal policies focus on nationwide infrastructure development, while regional governments are taking localized measures to attract investors, such as easing building regulations in designated business districts.
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.Macroeconomic Factors
- The institutional construction sector in South Korea is facing rising material and labor costs, affecting the development of public buildings such as schools, hospitals, and government facilities. Budget constraints are limiting large-scale projects, leading to delays or scaled-down initiatives.
- Increased investments in healthcare infrastructure and education facilities are driving institutional construction, especially in response to an aging population and digital transformation in education. Smart hospital projects and AI-integrated learning environments are gaining traction.
- The sector faces budget limitations and bureaucratic delays in project approvals. Additionally, environmental regulations for public buildings are becoming stricter, requiring compliance with green building codes, which adds to project costs and complexity.
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.
Government Policies & Programs
- The South Korean government is expanding investment in public healthcare facilities and smart education infrastructure. Policies emphasize improving accessibility to healthcare services and digitalizing education spaces.
- Grants and subsidies are being provided for hospitals and universities adopting smart technologies and sustainable construction practices. Regulations require new public buildings to comply with energy efficiency standards.
- While federal programs drive national institutional construction efforts, local governments focus on regional healthcare centers and school modernization projects to meet localized demand.
Industry-Specific Developments
- The use of AI and automation in hospital and school construction is improving efficiency. Smart infrastructure integrates digital patient care and AI-assisted learning tools.
- Green hospital and school designs incorporating solar energy, rainwater harvesting, and waste reduction systems are being implemented to align with carbon neutrality goals.
- The demand for skilled workers in medical facility construction and digital education infrastructure is growing, with a shortage of specialized engineers and architects slowing project completion rates.
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.Macroeconomic Factors
- Rising material and labor costs impact South Korea’s industrial construction sector, particularly in the manufacturing and logistics segments. Inflationary pressures have increased operational expenses, making large-scale industrial projects more expensive.
- The sector is experiencing strong growth in high-tech manufacturing, logistics, and semiconductor facility construction, driven by global supply chain shifts and government-backed industrial expansion. The push for smart factories and AI-driven automation further accelerates industrial construction activity.
- Limited availability of industrial land and stricter environmental regulations pose challenges for new developments. Additionally, the industry faces rising energy costs, making it more expensive to operate large industrial complexes.
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.
Government Policies & Programs
- The government is promoting the K-Semiconductor Belt Initiative, which aims to make South Korea a global leader in chip production. Policies supporting industrial park expansions and infrastructure improvements are also being implemented.
- Companies investing in advanced manufacturing and green industrial construction are eligible for tax incentives and grants. New policies require industrial facilities to adopt sustainable construction standards to qualify for government funding.
- While federal programs focus on national competitiveness in key industries, regional governments are developing specialized industrial zones to attract foreign direct investment (FDI) and boost local employment.
Industry-Specific Developments
- Adopting AI-driven automation, robotics, and digital twin technology is transforming industrial construction. Smart factories with 5G-enabled monitoring systems are becoming standard in high-tech manufacturing facilities.
- The government is pushing for carbon-neutral industrial parks with energy-efficient buildings and renewable energy integration. Manufacturers are implementing eco-friendly production processes to comply with global environmental standards.
- The industrial sector is experiencing a shortage of skilled high-tech manufacturing and automation workers. Training programs are being expanded to equip workers with expertise in semiconductor fabrication, AI-driven logistics, and green construction technologies.
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.Macroeconomic Factors
- Rising material and labor costs have significantly increased the expenses of infrastructure projects in South Korea. Inflationary pressures impact key sectors such as transportation, energy, and urban development, making it more challenging to finance large-scale projects.
- The South Korean government prioritizes expanding renewable energy infrastructure, smart cities, and high-speed transportation networks. Investments in green energy projects, electric vehicle (EV) charging stations, and smart urban planning are gaining momentum.
- Infrastructure projects face budget constraints, land acquisition issues, and delays due to environmental regulations. Supply chain disruptions and fluctuating material prices are also slowing the progress of major construction projects.
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.
Government Policies & Programs
- South Korea’s Green New Deal is shaping infrastructure development with policies to reduce carbon emissions, modernize transport networks, and enhance smart city capabilities. Large-scale infrastructure projects are also a key part of the government’s post-pandemic economic recovery plan.
- The government provides subsidies for renewable energy infrastructure, tax incentives for EV charging networks, and grants for smart city projects. Stricter sustainability regulations for public infrastructure require using eco-friendly materials and energy-efficient designs.
- The federal government oversees major national infrastructure projects, while regional governments focus on localized transport systems, flood management, and urban renewal projects. Coordination between central and local authorities is key to ensuring project efficiency.
Industry-Specific Developments
- Integrating AI, big data, and IoT (Internet of Things) technologies improves infrastructure planning and maintenance. Smart transportation systems, autonomous public transport, and AI-driven urban planning tools are being deployed in new projects.
- Using carbon-neutral materials, green roofing, and smart grids is becoming standard in infrastructure construction. South Korea is expanding solar, wind, and hydrogen-based energy projects to meet long-term carbon reduction targets.
- The demand for skilled engineers, renewable energy specialists, and urban planners is increasing. However, workforce shortages in specialized areas such as AI-driven infrastructure management and sustainable construction remain challenging.
Scope
Market Data and Insights: 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: 10-year market size & forecast in value and volume (area and units) terms by
- Housing type (multi family, single family)
- Key cities (Tier - 1, Tier - 2, Tier - 3 segmentation)
- Price point/income level (luxury, mid-tier, affordable)
- Construction stage (new construction, re-development & maintenance)
South Korea Residential Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Green building by Housing type (multi family, single family)
- Green building by Key cities (Tier - 1, Tier - 2, Tier - 3 segmentation)
- Green building by Price point/income level (luxury, mid-tier, affordable)
South Korea Commercial Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Office (further broken down by Grade A, Grade B, and Grade C)
- Retail (further broken down by Grade A, Grade B, and Grade C)
- Hospitality (further broken down by Grade A, Grade B, and Grade C)
- Restaurant (further broken down by Grade A, Grade B, and Grade C)
- Entertainment
- Sports facility
- Other commercial building construction
- Construction stage (new construction, re-development & maintenance)
South Korea Commercial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Office green building construction
- Retail green building construction
- Hospitality green building construction
- Restaurant green building construction
- Entertainment green building construction
- Sports facility green building construction
- Other commercial green building construction
South Korea Industrial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units)
- Manufacturing Plants building construction
- Chemical & Pharmaceutical building construction
- Metal & Material Processing building construction
- Construction stage (new construction, re-development & maintenance)
South Korea Institutional Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Healthcare construction
- Educational construction
- Other building construction
- Construction stage (new construction, re-development & maintenance)
South Korea Institutional Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Healthcare green building construction
- Educational green building construction
South Korea Infrastructure Construction Sectors: 10-year market size & forecast in value terms by
- Marine and inland water infrastructure
- Utility system construction (oil and gas infrastructure, communication infrastructure, power infrastructure, water and sewer infrastructure)
- Transportation infrastructure (highway, street and bridge construction, railway construction, airport construction, and tunnel construction)
- Construction stage (new construction, re-development & maintenance)
South Korea Green Infrastructure Construction: 10-year market size & forecast in value terms
South Korea Construction Cost Structure Analysis: 10-year market size & forecast in value terms
- Cost Analysis by Type (Material, Labour, Equipment, Others)
- By Material & Work Cost: It provides the cost outlook of material costs by type of materials used in construction (Cement, Steel, Sand, Aggregates, Bricks, Wood, Windows Glazing, Flooring, Plumbing, Electrical, Painting, Other Materials)
- By Labour Cost: It provides the cost outlook of labour costs (RCC Construction Work, Masonry and Plastering Work, Plumbing Work, Water Proofing Work, Carpentry Work, Electrical Work, Tile Fixing Work, CATV Antenna Points, Painting Work, Departmental Labour)
- By Type of Construction (New, Re-Development)
- By Material Cost: It provides the cost outlook of material costs by type of materials used in construction (Concreting Sand, Stone Aggregate, Ordinary Portland Cement, Reinforced Concrete (Grade 30 MPA), Reinforced Concrete (Grade 40 MPA), High Tensile Steel bars, Mild Steel Round Bars, Structural Steelwork, Plywood Formwork (1800*900*12mm), Clay Bricks)
- Type of Labour (Skilled vs. unskilled)
Reasons to buy
- Comprehensive Insight into Construction Market Dynamics: Gain a deep understanding of the construction market, including opportunities, industry trends, and key drivers across over 40+ market segments and sub-segments.
- Detailed Analysis of Construction Costs: Explore construction costs broken down by type, including material and labor costs. The report provides detailed information on costs by construction type and worker.
- Top Ten Cities Construction Value: Access valuable data on the construction market size for major cities, focusing on key city-level sectors.
- In-Depth Volume and Value Data: Obtain a thorough understanding of the market from both value and volume perspectives, covering historical data and forecasts by activity and units.
- Strategic Market-Specific Insights: Formulate targeted strategies by identifying growth segments and opportunities and assessing key trends, drivers, and risks within the construction industry.
- City-Level Trend Analysis: Get detailed trend analyses for tier-1, tier-2, and tier-3 cities, offering actionable insights for urban-focused strategies.
Table of Contents
1 About this Report
2 South Korea Construction Industry Dynamics and Growth Prospects
3 Key economic indicators of South Korea
4 South Korea Building Construction Analysis by Key Cities
5 South Korea Residential Construction Industry Market Size and Forecast
6 Analysis by Residential Construction Markets Outlook by Construction type
7 Analysis by Residential Construction Markets Outlook by Key Cities
8 Analysis by Residential Construction Markets Outlook by Price Point
9 South Korea Commercial Construction Industry Market Size and Forecast
10 Office Building Construction Outlook
11 Retail Building Construction Outlook
12 Hospitality Building Construction Outlook
13 Restaurant Building Construction Outlook
14 Sports Facility Building Construction Outlook
15 Other Commercial Building Construction Outlook
16 South Korea Institutional Construction Industry Market Size and Forecast
17 Outlook and Growth Dynamics by Institutional Building Construction Sectors
18 South Korea Industrial Construction Industry Market Size and Forecast
19 Outlook and Growth Dynamics by Industrial Building Construction Sectors
20 Infrastructure Construction Outlook
21 South Korea Marine and Inland Water Infrastructure Construction Industry Market Size and Forecast
22 South Korea Utility System Infrastructure Construction Industry Market Size and Forecast
23 South Korea Transport Infrastructure Construction Industry Market Size and Forecast
24 South Korea Construction Industry Market Size and Forecast by Cost Type
25 South Korea Construction Cost Industry Market Size and Forecast by Type of Material
26 South Korea Construction Cost Industry Market Size and Forecast by Labour
27 South Korea Construction Industry Market Size and Forecast by Building Type
28 South Korea Construction Industry Market Size and Forecast by Renovation Building Type
29 South Korea Construction Industry Market Size and Forecast by New Building
30 South Korea Construction Industry Market Size and Forecast by Material Cost
31 South Korea Construction Industry Market Size and Forecast by Construction Worker
32 Further Reading
List of Figures
List of Tables