"Investment targets and residential ownership no longer necessarily go together anymore, insofar as owning real estate and investments are becoming fully independent as real estate ownership becomes securitized in the days ahead,” said Chairman Park Sang-woo of the House Construction Forum. He is also president of the Korea Land and Housing Corp.
Chairman Park made the statement at a session of the House Construction Forum to celebrate its 20th anniversary at the LH Regional Headquarters in Nonhyun-dong, Seoul, on Nov. 4 with the theme being “The development of the housing industry and its future.” The participants at the event included Chairman Lee Sang-ho of the Construction Industry Research Institute, Professor Chang Tae-il of Konkuk University, Honorary Chairman Lee Sang-keun of the House Construction Forum and Professor Yoon Ju-seon of Hanyang University.
Chairman Lee Sang-ho said the supply of residential houses has been conducted via large-scale apartment allocation methods in connection with the construction of new cities around the country. But it will be no longer so. The need to develop large residential housing sites has fallen while the supply of residential units has grown, showing from now on that small-scale housing supply will dominate the housing market around the country. Honorary Chairman Lee Sang-keun said younger people prefer to live near forests, no longer preferring to live near railroad stations, demonstrating that singles and retired people have diversified their preferred areas for living.
Professor Yoon Ju-seon said the development of ICT has altered the future construction of residential units, noting that ICT has been the single most important agent for drastic change, with home electronic appliances taking up more than half of the space in a residential house. Further development of ICT will make homes “smarter.”
Chairman Lee said residential homes and housing sites have become business platforms for IT companies.
Real estate ownership and investments will be separated with the development of REIT. Chairman Park noted that one can’t own real estate in the Gangnam area unless they pay the price for a golden spoon. He went on to note that when REIT is generalized, general investors will be able to buy real estate in those exclusive areas.
Many opinions indicated that construction firms should improve their services. Professor Chang said the construction firms providing total services like Sumitomo and Mitsui in Japan made three times more profits that other general construction firms in Japan.
The Housing Construction Forum was launched in 1994 by a group of the 50 largest construction firms in Korea. As of this year, 75 seminars have been held at the forum, leading construction dialogue on trends in the construction industry.
Korea Land and Housing Corp. is supplying commercial rentals, residential rentals and other tailored rental houses for low-income people. LH's social contribution activities are not limited to meeting the satisfaction of basic housing for low-income people, but it is extended to creating “happy spaces” with vitality. They include creating jobs for residents, supporting self-reliance and composing educational environments.
A view of LH headquarters in Jinju, Jeollanam-do. (Photos: LH)
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