LH to order 18,000 modular homes by 2030, cutting unit costs through economies of scale

[Financial News] By 2030, modular housing projects worth 4.8 trillion won will be brought to market through Korea Land and Housing Corporation (LH).
According to LH on the 4th, LH President Lee Seong-hun held a meeting on promoting modular housing the previous day at its Seoul Regional Headquarters with six leading domestic modular housing manufacturers, including NRB, Plan M, Yuchang, Kumkang Kind, Daeseung Engineering and XiGaiste. The meeting was intended to fast-track the establishment of a mass-production system for modular housing, expanded orders to encourage investment in facilities, and reductions in manufacturing costs—measures the president directed during a visit to the Incheon Gyeyang 3rd Generation New Town site on October 20.
LH unveiled to the industry its “LH Modular Housing Order Plan,” drawn up in line with government housing supply policies, including the “8·13 Rapid Housing Supply Plan.” It will first move quickly to finalize orders for Namyangju Wangsuk 2 Block A10 (555 homes), Goyang Changneung Block A3 (668 homes) and Pocheon Songu 2 Block A1 (916 homes). Then, from 2027 to 2030, it will order at least 3,000 homes annually, centered on 3rd Generation New Towns in the Seoul metropolitan area. The annual volumes are 2,200 homes this year; at least 3,500 each in 2027 and 2028; at least 4,000 in 2029; and at least 4,500 in 2030. In particular, next year’s volume will be brought forward and increased to at least 3,500 homes. The aim is to ease manufacturers’ concerns that factory utilization could fall by guaranteeing a stable volume of orders.
The system will also be overhauled. A new “technology development period” will be introduced to encourage private-sector technology development and investment in automated equipment. Pocheon Songu 2 Block A1, the first project to apply the measure, will be ordered in advance at year-end, giving the selected contractor time to prepare for R&D and automated mass production before construction begins. Progress payments, previously made only after modular units were delivered to the site, will instead be disbursed in stages in line with factory production. This is intended to ease the financial burden on an industry that must make major investments in automation equipment at this early stage of the market. LH will also introduce a volume-unit price linkage system, setting unit-cost reduction targets by scale and year and allocating orders according to cost-saving results.
The industry welcomed the plan. Executives from manufacturers who attended the meeting said, “Until now, one-off, sporadic orders have made it difficult to maintain factory utilization and decide on facility investments.” They added, “We are deeply grateful for the unprecedented consecutive orders for 18,000 homes on such a large scale. The private sector will also invest in automated production lines to dramatically lower manufacturing costs and repay this support by supplying high-quality homes.” Attendees also agreed to pursue reforms to the ordering system, new modular-specific standards covering features such as dry floors and integrated heating and cooling systems, and a quality certification system, in order to capitalize on modular construction’s advantage of reducing construction time by 20–30% compared with conventional methods.
LH plans to upgrade its quality management system using technologies verified at demonstration complexes, including Sejong Block 5-1 (12 stories, 450 homes) and Uiwang Chopyeong Block A4 (22 stories, 381 homes), which received an excellent grade for long-life housing. Its first step will be to establish a system for taking orders based on standard designs for 36-, 46- and 54-square-meter modular homes registered on the Public Procurement Service’s Korea Online e-Procurement System (KONEPS), then mass-producing them. As the market matures, the plan is to move toward making units in advance and assembling them on site, reducing both construction time and costs.
LH President Lee Seong-hun said, “Modular housing is a key solution that can resolve all at once the aging construction workforce, shortage of skilled workers, safety accidents and quality problems, while dramatically accelerating the nation’s housing supply.” He added, “Using large-scale orders as a catalyst, we will boost bold private-sector investment in facilities and cost competitiveness, build a K-modular housing ecosystem, and complete a major transformation of the future housing industry.”

[email protected] Jeong Gyeong-su Reporter