The rise of Korea’s ‘5-day city, 2-day countryside’ lifestyle fuels increased interest in modular construction. Korea’s market for modular building is anticipated to experience substantial growth, potentially hitting 2 trillion won by 2030. Concurrently, Estonia is leading international trends with its specialisation in wood modular construction. Korea and Estonia’s collaboration on sustainable wood materials is driving industry innovation.
Work in the city, rest in the countryside: the ‘5-day city, 2-day countryside’ lifestyle—spending five days of the week in the city and the remaining two days in rural areas—continues to be steadily embraced in Korea. It’s about recovering from the exhaustion of fast-paced urban life in the countryside and then returning to the city’s daily routine.
This lifestyle is popular among most modern people who cannot leave the city, which serves as their economic and social activity hub. Choosing complete rural migration carries significant risks as it means completely changing one’s living environment. Moreover, when starting rural life, the environment might not suit one’s preferences. Therefore, the ‘5-day city, 2-day countryside’ lifestyle functions as a compromise that reduces relative risks and burdens while allowing people to experience a new way of life.
Wooden modular house elements in an Estonian factory. Modular construction refers to a method where parts of a building are pre-produced in a factory. Photo: Renee Altrov
The Korean modular construction market is growing rapidly
As this lifestyle spreads, interest in modular construction naturally increases alongside it. Modular construction refers to a method where parts of a building are pre-produced in a factory, then transported to the site for assembly and installation. The benefits of shortened construction periods, cost reduction, and customisation according to the user’s lifestyle patterns and purposes particularly align with the needs of those seeking second homes for their ‘5-day city, 2-day countryside’ lifestyle.
Indeed, Korea’s modular construction market is growing rapidly. According to the Korea Iron and Steel Association and the Korea Research Institute for Construction Policy, the related market size increased from 175.7 billion won in 2022 to over 800 billion won in 2023 and is projected to expand to 2 trillion won by 2030. Major Korean corporations are actively moving to secure early positions in this expanding modular market.
“Our partnership with Samsung C&T marks an exciting first step, and we are confident that the synergy between Estonia’s sustainable construction expertise and Korea’s technological innovation will drive groundbreaking developments in the industry.”
Alo Tamm, CEO of Harmet
First, Hyundai Engineering has collaborated with Hyundai Steel since 2023, forming a technical consultative body for modular construction research. They have also established a testbed called ‘H-Modular Lab’ to demonstrate the entire modular construction process from design to production, transportation, and installation.
GS Engineering & Construction acquired Poland’s wood modular specialist Danwood S.A. and UK steel modular specialist Elements Europe Ltd. in 2020, targeting the global market. LG Electronics has been commercialising modular buildings called ‘Smart Cottage’ since the fourth quarter of last year, with plans to integrate its AI appliances and IoT technology to build customised AI home solutions.
Estonia exports 95% of its modular wooden houses
Turning to the global market, the Northern European country of Estonia stands out prominently. With 51% of its territory covered by forests, Estonia possesses abundant wood resources and the historical expertise necessary to preserve and optimise them.
It is also the country with the most certifications for wood construction production in Europe, with an annual export value of about 3 billion euros in related industries. Since 2010, Estonia has been Europe’s largest exporter of prefabricated wooden houses, exporting 95% of the total production (e.g., export reached 540 million euros in 2023).
FACTS
51 % of Estonia is covered by forests.
Estonia is #1 exporter of prefabricated wooden houses in Europe.
3B € of yearly export value for the industry.
16% of the added value created in Estonia is related to the forestry and wood sector.
Estonia’s wood modular construction is gaining attention due to its strengths in environmental friendliness and sustainability. Using wood instead of concrete can reduce carbon emissions by 40% to 77%, depending on the building type, and modular design can prevent material waste and carbon dioxide emissions. It can also save up to 60% of energy during renovations, and through rapid assembly processes, it offers excellent utility in reducing project schedules by up to 50% and cutting costs.
Wooden modular house built in Estonia. Photo: Renee Altrov
Wood construction helps to achieve the European policy goals
Korean companies are actively exploring cooperation with Estonian companies. In 2023, Harmet, Estonia’s largest modular manufacturer, signed an MoU with Samsung C&T. “We see huge potential in the collaboration between Estonia and Korea, particularly in the field of wood and hybrid (steel and wood combined) modular construction,” said Alo Tamm, CEO of Harmet, one of the largest modular manufacturers in the Baltics and Northern Europe.
“Modular construction technology provides easily expandable solutions that minimise environmental impact, contributing to reducing ecological footprints while responding to construction crises such as housing shortages.”
Annika Kadaja, General Manager of Woodhouse Estonia
“Our partnership with Samsung C&T marks an exciting first step, and we are confident that the synergy between Estonia’s sustainable construction expertise and Korea’s technological innovation will drive groundbreaking developments in the industry. Estonian companies have long-lasting experience exporting their products to various countries, and collaboration with Estonian companies could also be a good opportunity for Korean companies to enter the European market or participate in Ukraine recovery projects,” noted Tamm.
“Wood enables circular construction, accelerates the transition to eco-friendliness, and supports the development of advanced building systems. This has become the intersection for achieving the major policy goals pursued by Europe. Therefore, wood is not only a sustainable choice but also a smart and strategic one,” said Annika Kadaja, General Manager of Woodhouse Estonia.
Estonia-Korea partnership: a model for global construction industry
“Modular construction technology provides easily expandable solutions that minimise environmental impact, contributing to reducing ecological footprints while responding to construction crises such as housing shortages. At a time when we need to move toward a future where buildings are designed with disassembly, reuse, and material recovery in mind, wood is the key element in realising this circular future,” she added.
As demand for flexible, sustainable living solutions rises, the convergence of Korea’s growing modular market and Estonia’s leadership in eco-friendly wood construction signals a promising future. Industry experts view the cooperation between the two countries as more than just a business opportunity—it’s a strategic alignment of innovation and sustainability. With Korea’s tech-driven approach and Estonia’s deep-rooted expertise in timber, this partnership could serve as a model for the global construction industry, paving the way for smarter, greener, and more resilient living spaces in the future.
This content is funded by the European Union – NextGenerationEU
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