Samsung and LG Join Modular Housing Boom... 'Public Orders' Key to Preventing Move-In Cliff [Real Estate AtoZ]

Supply of Move-in Units Halved... Modular Housing Emerges as an Alternative
LH Uiwang Chopyeong and GH Hanam Gyosan: High-Rise Modular Construction
Construction Period 30% Shorter, but Costs Are 30% Higher
Urgent Need for Government Action to Spur Mass Production and Facility Investment

As the number of newly completed apartment units has dropped by nearly half compared to last year, modular housing, which can reduce construction time by about 30%, is emerging as an alternative supply solution. Both the government and the National Assembly have begun to improve related systems. However, industry experts point out that stable public orders must come first in order to enable facility investment and mass production, which would in turn help lower the higher unit costs compared to traditional construction methods.

Full-Scale Demonstration of 22- and 25-Story Modular Buildings

Exterior view of modular housing model home at Uiwang Chopyeong A-4BL. Korea Land and Housing Corporation (LH)

According to housing statistics from the Ministry of Land, Infrastructure and Transport as of May 5, the total number of housing completions (move-ins) nationwide from January to May this year was 88,143 units, a 46.7% decrease from the same period last year. This is the first time since statistics began in 2011 that the cumulative number of completed units by May has fallen below 100,000. A decrease in new apartment supply also reduces the number of units available for new lease or rental, and together with rising sales prices, can further raise the barrier for homebuyers without homes.

Modular housing is considered a construction method that can help bridge such supply gaps. Walls, floors, windows, pipes, and finishing materials are pre-manufactured in a factory and assembled on-site, resulting in fewer variables compared to traditional, site-centric construction. The “Special Act Review Report on Supporting the Promotion of Modular Construction,” published by the National Assembly’s Land, Infrastructure and Transport Committee in February, concluded that modular construction can shorten construction periods by about 30% compared to conventional methods, while also improving quality consistency and safety through factory-based mass production.

The industry’s technical capabilities have advanced to high-rise construction stages. The Uiwang Chopyeong A-4BL integrated private-participation public housing project in Gyeonggi Province, commissioned by Korea Land and Housing Corporation (LH), is a 22-story apartment complex where all 381 units are built using the precast concrete (PC) modular method. Compared to the traditional reinforced concrete (RC) on-site casting method, this approach reduces construction time by about four months and, recently, received the “Excellent Grade” certification for long-life housing—a first for modular housing. Completion is scheduled for July 2027.

In the third phase of new towns, even taller modular complexes are planned. The Hanam Gyosan A-1BL private-participation public housing project commissioned by Gyeonggi Housing & Urban Development Corporation (GH) will use the PC modular method for 400 out of its 723 units. Construction is set to begin in 2027, with completion targeted for December 2029.

Private Sector Takes Individual Initiatives

A front view of the wooden modular sample house of GS Construction Xi Geist. GS Construction

Construction companies are expanding their modular business independently. GS Engineering & Construction has entered the public complex housing market through its wooden modular subsidiary, moving beyond individual detached houses. Recently, it developed a public rental housing complex with 19 units in Gongju, South Chungcheong Province, using modular techniques. Samsung C&T has applied modularization technology to apartments, showcasing pre-fabricated modular housing technology through its “Raemian Next Home” demonstration building in Yongin, Gyeonggi Province. Hyundai Engineering & Construction has introduced the technology to common-use facilities and modular elevators in multi-family housing, while Kolon Global has expanded its business scope to schools and commercial facilities through its subsidiary. Electronics companies are also entering the sector. Last month, Samsung Electronics unveiled a model where more than 80% of the house is manufactured in the factory and equipped with AI solutions. In the same month, LG Electronics introduced a low-rise modular house, targeting B2B demand such as corporate training centers and lodging facilities.

Modular specialists are diversifying construction methods beyond steel-frame modular to include PC modular, reducing the burden of transportation and on-site assembly. NRB, based in Gunsan, North Jeolla Province, and responsible for the construction of the Uiwang Chopyeong modular complex, is converting its primarily manual PC component production to an automated line. Once the system is established, the number of workers required in the factory can be reduced by 51% compared to the traditional method. By measuring curing temperatures in real-time and integrating production management systems, the related workload is expected to be reduced by 34–60%. A three-dimensional (3D) PC Rahmen modular composite method is also being introduced. This technology shortens construction time by 30–40% and reduces on-site manpower by 40–60% compared to conventional reinforced concrete methods. It will be applied to 400 units in the Hanam Gyosan integrated public rental project.

However, many analysts say that technological advances and new product launches by companies do not immediately translate into large-scale housing supply. Because applications are fragmented among detached homes, demonstration projects, and commercial facilities, there are limits to increasing factory utilization rates.

Construction Costs Are 30% Higher... Delays in Tenders and Legislation

A model of the precast concrete (PC) core system displayed at the '2026 Land, Infrastructure and Transport Technology Exhibition.' Stairwells and wall components manufactured at the factory are transported to the site for assembly, and then connected to the next components through rebar left on top. Photo by Seo-yoon Choi

The main obstacle is cost. The Ministry of Land, Infrastructure and Transport has found that construction costs for modular methods are about 30% higher than for traditional reinforced concrete methods. This is largely due to a lack of orders, which makes it difficult to set up automated factory facilities and mass production systems. If floor plans differ from project to project, new molds must be made for each module, which drives up unit costs further.

Last year, the government announced plans to promote modular housing supply as part of the “September 7 Housing Supply Expansion Plan.” By the first half of this year, it aimed to establish guidelines for the design and construction of modular purchase-lease housing and methods for determining purchase prices, and to launch pilot projects focusing on low-rise houses in the second half. Legislation for an “Off-Site Construction (OSC) · Modular Special Act (provisional name)” was also included. In the “2026 Economic Growth Strategy” announced in January, the government set a goal of supplying more than 16,000 modular public housing units by 2030. This year, through pilot projects such as rental housing and staff housing for public agencies like LH, the plan is to increase the number of modular public units from 1,500 to more than 3,000.

However, public tenders are being delayed. LH had planned to revise guidelines for the design and construction of modular purchase-lease housing and to announce a pilot project in June, but the tender has yet to be issued.

Legislative discussions in the National Assembly are also stalled due to industry disagreements and remain pending in the standing committee. On December 31 last year, 11 lawmakers from both the Democratic Party and the People Power Party, including Joonho Han and Jaeok Yoon, introduced the “Special Act on Supporting the Promotion of Modular Construction.” The bill requires the Minister of Land, Infrastructure and Transport to establish a basic plan every five years and to introduce new systems for production and construction certification.

During the legislative notice period, the bill faced more than 7,000 objections. General construction firms expressed concerns about expanding the contracting eligibility of modular manufacturers, while the electrical, information and communications, and fire protection industries objected to the special provisions for integrated bidding. Currently, for reasons of safety and expertise, clients contract separately (split orders) for electrical, communications, and fire protection works; if integrated bidding is allowed, large construction companies may win entire projects and then subcontract specialized work, which could become more common.

While discussions are stalled, last month, 12 lawmakers from the People Power Party, including Jongyang Kim, introduced a separate “Special Act on Supporting the Promotion of Modular Construction and Coexistence with Local Small and Medium Enterprises.” This bill removed the special provision for integrated bidding from the previous bill and newly included a clause mandating participation ratios for local firms in joint supply arrangements, as specified by the Ministry of Land, Infrastructure and Transport decree. While the bill recognizes the modular market as a separate industry and sets quality control standards, it has been criticized for weakening the direct means to improve productivity, as the integrated design, manufacturing, and construction bidding provision—long requested by the industry to reduce construction costs—has been omitted.

A modular industry insider said, "It may seem that building houses in a factory would be cheaper, but in Korea, designs differ from project to project, making it difficult to produce the same model repeatedly. The factory needs to operate stably to enable bulk material purchases, workforce allocation, and investment in automated facilities." They continued, "It is difficult for small manufacturers to make large-scale facility investments without confirmed demand. There needs to be sufficient volume for investment to happen, and only then will prices come down."

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