Current Status and Policy Challenges of Housing Remodeling Market
Publication Date 2024-06-17
Researchers CERIK
● Housing remodeling is being promoted with complex motives such as improving the residential environment, economic effects, and government policies.
- Housing remodeling targets all inventory houses except "old and defective buildings" that need to be reconstructed, and remodeling can promote social and economic benefits by substantially improving the residential environment and inducing the longevity of housing.
- If the total floor area of the building is reduced due to the strengthened floor area ratio, building ratio, and parking lot regulations after demolition of old houses, remodeling that can maintain the existing area will be selected.
- The average life expectancy of domestic apartment houses is about 30 years, about 1/2 to 1/3 of that of major countries. The short-term repetition of housing construction causes waste of resources, environmental pollution, and increased social and economic costs, and the need for housing longevity through remodeling increases.
- Remodeling maintains and utilizes major structures of buildings, which is environmentally friendly due to low carbon emissions compared to reconstruction, and the need for green remodeling old houses is high, so support policies from the government and local governments are being promoted.
● Housing remodeling accounts for 3% of all building remodeling. Housing remodeling is centered on detached houses, and apartment remodeling is still in the inactive stage.
- Based on the building construction area in 2023, the proportion of new construction and remodeling is 80:20, of which the proportion of non-residential and residential use is 97:3, and the proportion of single-family houses and multi-family houses among residential use is 82:18, that is, in the overall remodeling market, only 3% of the houses (apartments, row, and multi-family houses) are remodeled.
- The proportion of apartment remodeling in apartment remodeling has increased from 15.9% for three years (2010-2012) to 38.4% for 2021-2023, and apartment remodeling is currently insignificant, but it is expected that future growth potential is high.
● Housing remodeling is divided into "full remodeling" and "partial remodeling." Apartment remodeling is very interested in full remodeling, and partial remodeling such as green remodeling and convenience facility expansion is also needed.
- "Partial Remodeling" will improve indoor architecture, construction facilities, floors and walls, interior materials, external finishes, external spaces, and energy facilities to promote green remodeling parking lots and complex environmental improvements.
- "Front Remodeling" promotes flat expansion such as plane structure change, vertical, horizontal, and annex expansion, and in the case of apartments, it is actually competitive with reconstruction due to remodeling at the level of reconstruction.
● Various support for housing remodeling is needed in consideration of the net social and economic function of the long-lived housing.
In particular, the government's full support for green remodeling should be provided.
- If green remodeling, which must be carried out at carbon neutrality, is left to market autonomy, it is expected to fail, and the government needs to actively intervene such as providing construction subsidies, low-interest loans, tax benefits, and easing construction regulations
- In the case of old low-rise houses, "partial remodeling" is required in residential areas with high possibility of redevelopment, "partial and full remodeling" is implemented in existing areas, and systematic collective housing remodeling is required by forming a "low-rise housing remodeling combination."
- Green remodeling of old apartments, improvement of residential environment (such as securing parking lots), and improvement of indoor environment of individual houses need to be activated in connection with long-term repair plans
- The uniformity of government policies as "reconstruction" or "full remodeling" limits consumers' rational choices, requires activation alternatives tailored to each characteristic, and reconstruction and remodeling should be complementary.