The South Korean solid wood products market

Construction Review, Summer, 1993

Restrictive government building and fire codes within the large urban areas have effectively limited the widespread use of wood frame construction in favor of high-rise, steel, concrete, and masonry apartment buildings. But there remains strong potential for increased wood use for interior design and for high value or second homes, especially in the suburbs. The government's exclusionary policy on wood frame construction is now undergoing a fairly comprehensive review that could eventually lead to major changes in building material usage to the advantage of U.S.-style wood frame construction - at least in single-family and small multi-unit apartment buildings. As the country has become more affluent, the size of the average living unit has also increased, although in relation to average U.S. housing, South Korean floor space is considerably smaller - less than one-half the size.

The selling price of these relatively small size units (about 70 percent of all new housing constructed during the 5-year plan will be 650 square feet or less) will continue to be set by the government. For those larger units (exceeding 650 square feet) built by the private sector, selling prices gradually will be liberalized to provide builders with more flexibility in their choice and utilization of construction materials.

The "move-up" market is playing an increasingly important role in Korea's housing market. As the housing shortage becomes less acute over the next several years, rising incomes should bring with them higher expectations for housing, which should mean more single-family and low-rise development.

Before being accepted as a widespread building material, as it was in pre-war times, wood in South Korea will have to overcome many local stigmas, including the memories of numerous shoddy wooden structures which were built in the aftermath of the Korean conflict. The development, propagation, and dissemination of U.S. fire resistant methodology and western 2x4 prefabrication technology will be necessary to bring about any increased use of wood frame housing in the country over the next few years.

South Korea's wooden furniture industry increased by fivefold the number of its factories over the 1975-1989 period. With the introduction of modern manufacturing facilities and large-scale housing projects during the 1970s and 1980s, South Korean furniture sales are still directed primarily to the booming domestic market, which absorbed more than 80 percent of the estimated $2 billion in total 1990 shipments, but the export market share has also been rising. The government has targeted furniture exports as an important growth sector and, together with the private sector, views wooden furniture exports as a major foreign currency generator. The government has no restriction on public consumption of wooden furniture, and provides the furniture sector with technical assistance for design, and market information, as well as providing an import tariff rebate system for the reexport of its wood manufactures.