Successful Recruitment for the 13th Advanced Technology Construction Training in Canada

Canada Wood Korea has planned, recruited and delivered 2 week-long extensive wood frame construction training in Canada during the last 12 years called “Advanced Technology Construction Training (ATCT)”. The training program has focused on transfer of the latest and best Canadian wood frame construction technologies and best practices for Korean designer, builders, developers, students and material distributors.

As the interests in efficient and healthy houses have been growing fast due to the periodic upgrades of the Korean energy conservation code and degradation of air quality,  the training program has focused on delivering Super E House Standards, the energy-efficient, environmentally-responsible, healthy and cost-effective wood frame house construction during the last two years in collaboration with the Super E Office/Energy Efficient Exporters Alliance(EEEA) and the University of the Fraser Valley (UFV).

Again this year, the recruitment was successful and 21 participants – 8 architects, 9 builders, 2 building products importer/distributors, one Korea Wood Construction Association’s manager and one architecture student – have enrolled in the training. And their participation is symbol of the commitments they have for the wood frame construction as it means 2 week-long interruptions of their work and spending more than $4,000 CAD.

On June 30 at the CWK office, the pre-training webinar on 2 subjects – the Evolution of Canadian Wood Frame Housing Technology, and An Introduction to Canada’s Super E Initiative – were delivered by Jeff Culp, General Manager of Super E Office/EEEA and orientation was delivered by CWK staff to help them to make the best use of time in Canada.

Revision on Seismic Design Standards for Buildings with Total Floor Area Exceeding 200m2 by September

Distribution of Earthquake Epicenters and Magnitudes in Korea
Image credit: Korea Meteorological Administration

More buildings will be subject to seismic design requirements as the current requirements, applied to buildings with a total floor space exceeding 500m2, will be more widely applied to include buildings with over 200m2 in floor space as early as August of this year. It appears that stricter seismic design requirements are being prepared in response to rising social concerns toward earthquakes due to successive reports on the disaster.

Seismic design requirements were first introduced in 1988 for buildings 6 storey and higher or total floor area 100,000m2 for the first time in Korea and the latest major revision was made in 2005 requiring building structures 3 storey and higher or total floor area 1,000 m2 be seismically designed for safety and in 2015, minor change was made to restrict the total floor area to 500 m2.

The Ministry of Land, Infrastructure and Transport (MLIT) announced on June 15 that they will prepare a revised bill of the Enforcement Decree of the Building Act by reflecting major contents of the Comprehensive Measure for Earthquake Prevention announced at the end of last year, which will be followed by the preannouncement of its legislation.

According to the revised bill, the minimum total floor space of buildings subject to seismic design requirements for reducing earthquake damages will grow stricter from the current 500m2 to 200m2. All newly constructed houses including single family houses and apartment houses will be obligated to have seismic design regardless of the total floor space.

However, owing to the strong persuasion by the Korea Wood Construction Association along with proven technical information from Canada Wood Korea, MLIT allowed exemption for wood frame buildings to be obligated to meet seismic design requirements only when the building’s 3 storey or higher and total floor space in excess of 500m2 like before. The most important implication of the successful lobbying seems to be that the Korean government has acknowledged the inherent strength of the wood frame construction against earthquakes, thus boosting consumer confidences in wood frame structures and enhancing the competitiveness of the wood frame structure in Korea.

Canada Wood Korea is planning to hold series of workshops on seismic design for wood frame construction in this and coming years in response to the revisions related to the increased interest in seismic design.

Return of single family houses, Closing in Upon 130,000 Households a Year

Single family houses were overshadowed by the popularity of apartment houses, but it is today enjoying a renaissance. Following the changes in the residential environment and the efforts of construction companies to find new business opportunities, single family houses are regaining popularity and the number of wood buildings is on a constant rise.

In Korea, single family houses fell from being mainstream housing with the advent of the apartment homes in the 1980’s and was pushed farther away from the interest of homebuyers when high-rise apartments a hit in the 2000’s. However, single family houses are emerging as the new housing trend based on the recently increased supply.

In fact, the number of single family houses traded increased from 81,891 households in 2010 to 103,211 in 2014 and 129,065 in 2015, which is the highest figure since 2006 since such statistics were recorded.

The numbers of building permits and construction reports for wood buildings are also increasing. There were 5,600 permits and 4,200 construction reports for wood buildings in 2006 when Canada Wood Korea was established. But, the figures have increased consistently and the number of wood building permits increased up to 17,000 and wood building construction reports to 15,000 as of 2016 despite the stagnation in the Korean construction industry.

One of the reasons single family houses regained popularity is the new type of residential complex. A good example of this is the single family house block hat refers to a housing complex with community facilities. While managed communally like apartment house, it retains the advantages of single family houses such as the protection of privacy and maximized space. In particular, the single family houses community development is attracting relatively young customers in their 30s and 40s instead of older consumer groups who were the major customers of the real estate market.

Maple Hall – Community Center of Bukhangang Dongyeonjae

Large construction companies are also joining the related businesses. Single family homes used to be for small and medium construction companies, as the scale was small and it was difficult to make a large profit. However, larger construction companies are changing their course of business as the ‘Wellbeing’ fever of those in their 20s and 30s brought a huge impact on the real estate market unlike the older generation that considered real estate as an investment.

Bukhangang Dongyeonjae, constructed by Gyeonggi Urban Innovation Corporation (GICO), which signed an technical cooperation MOU with Canada Wood, is also a community development of single family houses. The Province of Alberta provided lumber for the community center of Bukhangang Dongyeonjae through Canada Wood and GICO named the facility ‘Maple Hall’ in acknowledgement of the support.

Korea Economy, Construction & Lumber Shipments

Economy

South Korea’s economic growth slowed in the second quarter of this year from a year earlier due to decreased exports, mainly in shipments of transportation equipment, petrochemicals and chemical products. In the second quarter, GDP increased 0.6%, down from the previous quarter’s 1.1% gain.

 

Exports in the second quarter fell 3% from the previous quarter and declined 0.1% from the previous year. Although the second quarter exports declined, exports during the first half of 2017 totaled at US$279.4 billion, up 15.8% points from the same period of 2016 while imports jumped 21% to US$233.6 billion resulting the trade surplus of US$45.8 billion.

Both exports and imports marked the largest highest half year tally since 2014 on the upturn in oil prices, and recovering demand for chips, steel and displays.

The Ministry of Trade expects that South Korea’s exports will grow 10% to US$545 billion by the end of 2017 on the back of recovering world economy and expanding global trade and imports will likely rise 14% on-year to US$463 billion.

Under the new Moon Jae-In government, consumer sentiment improved with more spending on durable goods, such as home appliances and handsets while spending less on clothes and shoes.

South Korea’s jobless rate stood at 3.8% in June, up from 3.6% a year earlier, but the unemployment rate for young people aged between 15 and 29 was 10.1%, up from 9.4% tallied a year earlier and from May’s 8.6%. As a countermeasure, South Korean government is pushing for an 11.2 trillion won (US$9.99 billion) supplementary budget aimed at creating jobs and boosting the economy.

The South Korean economy seems to have entered an upside cycle as its exports, the key economic driver, posted the eighth consecutive month of growth since November last year on the back of rising global trade, therefore, South Korea government raised its economic growth forecast for this year to 3%, pledging to create inclusive growth with its four major economic policy pillars of income-led growth, job creation, a fair economy and innovative growth.

The volatility in the US Dollar- Korean Won exchange rates slightly eased in the second quarter from a quarter earlier as global financial markets stabilized. In the second quarter, the local currency traded at an average of 1,130.1 Korean Won against the US Dollar, compared with 1,152.6 won in the previous quarter.

The exchange rate for Canadian Dollar averaged at 840.88 won in the second quarter of 2017, down by 6.8% from 902.52 in the same quarter of 2016 and also down by 3.53% from 871.69 in the previous quarter.

Housing Construction

In the first half of the year, South Korea’s household debt grew by 40.3 trillion won, compared with an expansion of 50.4 trillion won for the same period in 2016. The country’s household debt has crimped private consumption and made it harder for the central bank to increase its key interest rate. With home prices in Seoul and other areas showing signs of overheating, South Korean government has pushed to prevent liquidity from being used for real estate speculation.

Amid ongoing government intervention to limit the supply of new homes, especially new apartment in Seoul, as a way of limiting the rise in household debts, South Korea’s housing starts in number of buildings in the first half of 2017 decreased 11.6% to 51,157 buildings from a year earlier 57,875 buildings while that in number of units significantly decreased 29% to 168,799 units from a year earlier 237,750 units. Housing permits in number of buildings for the same period of 2017 also decreased 5.9% to 60,732 buildings from a year earlier 64,529 buildings while that in number of units significantly decreased 16.2% to 297,787 units from a year earlier 355,309 units.

While the overall residential construction sector struggles, the number of wood building permits in the first half of 2017 increased 4.4% to 8,767 buildings from a year earlier. However, the number of wood building starts for the same period decreased 4.8% to 7,075 buildings.

Total floor areas of wood building permits for the same period in 2017 increased 10.2% to 812,698 m2 but that of wood building starts slightly decreased 1.8% to 660,341 m2 from a year earlier.

Lumber Shipments

BC softwood lumber export volume to South Korea for the first five months of 2017 decreased 2.7% to 124,495 cubic meters as compared to 127,938 cubic meters for the same period of 2016.

However, export value for the same period increased 8.6% to CAD$35.367 million as compared to CAD$32.565 million for the same period in 2016.

Canadian Wood Products Aid the Regeneration for Donuimun Village in Seoul

In 2016, the Seoul Metropolitan Government has decided regeneration of Donuimun village located right next to the Gyeonghuigung Palace, one of the 5 palace complexes in Seoul of the Kingdom of Joseon, to preserve its historic values, community and small businesses rather than demolishing and turning it into a neighbourhood park.

The village, which still retains the layout of streets and lots formed in 1800’s and has characteristics of an unplanned neighborhood grown over the years, has buildings and houses of various usages, ages and construction methods. Types of buildings range from traditional Korean post and beam houses, colonial era wooden structures to modern concrete structures.

One of the three architectural firms involved in planning of the regeneration project is Studio Nova and they are familiar with all types of wood construction having participated in various Canada Wood Korea’s and CWK sponsored training programs and missions, and they have specified old wooden buildings to be restored with wood and Canadian wood products are used for renovation of 13 houses and rebuilding of 5 houses in the village.