Market Trends of South Korea HVAC Industry
HVAC Equipment Segment Holds Significant Market Share
- Ventilation systems like air handling units (AHUs) are frequently utilized in spacious establishments that numerous individuals, such as shopping malls, frequently visit. These establishments are required to adhere to stringent regulations regarding the removal of carbon dioxide and the maintenance of air quality. A significant volume of fresh air must be introduced into the building to ensure proper ventilation, necessitating multiple blower fans for air circulation. However, the need for many blower fans can be significantly reduced by utilizing air handling units to bring in outside air.
- Ventilation systems are capable of eliminating harmful air pollutants that may cause a range of illnesses and respiratory issues, including lung cancer, ischemic heart disease, asthma, and chronic obstructive pulmonary disease. Furthermore, the increasing need for efficient air conditioning systems in commercial structures, coupled with the emergence of eco-friendly buildings and intelligent cities, is anticipated to affect the market positively.
- Moreover, a heat pump is a significant HVAC equipment that utilizes work to transfer heat from a colder area to a hotter area by transferring thermal energy through a refrigeration cycle. This process cools the colder area while warming the hotter area. During chilly weather, a heat pump can extract heat from the cold outdoors to warm a house. Conversely, in warmer weather, the pump can be designed to transfer heat from the house to the warmer outdoors. Due to their ability to transfer heat instead of generating it, heat pumps are more energy-efficient compared to alternative methods of heating or cooling a residence.
- In response to the growing trend, many companies are introducing various products to cater to the needs of the commercial, industrial, and residential HVAC equipment sector. For instance, in October 2023, Panasonic developed an advanced central heat pump system specifically engineered to provide heating and cooling for residential areas. This latest offering comes in two distinct models: the Interios Low-Carbon Hybrid Heating System and the Interios All-Electric Central Heat Pump System.
- South Korea's construction industry is experiencing rapid growth. Both the public and private sectors are adopting green building practices, creating a substantial opportunity for HVAC services and equipment. In 2023, the construction sector in South Korea contributed around KRW 89.5 trillion (USD 65 billion) to the gross domestic product (GDP), as stated by the Bank of Korea.
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Residential Segment Holds Significant Market Share
- The demand for HVAC equipment and services in South Korea's residential sector is increasing due to the government's growing financial backing for sustainable community development, which is expected to contribute to the growth of energy-efficient HVAC systems. Moreover, the surge in air pollution and rapid urbanization drive the country's demand for heating, air conditioning, and ventilation systems.
- In July 2024, the Korea Land and Housing Corporation (LH) revealed plans to commence the construction of 50,000 public houses this year, followed by 60,000 next year. With housing prices on the rise, particularly in the metropolitan area, the government aims to swiftly boost the supply of public housing to alleviate market instability.
- Similarly, in March 2024, the South Korean government committed to allocating a total of KRW 10 trillion (USD 7.46 billion) for revitalizing housing in older urban areas of Seoul. Traditional single-family homes, known as "dandok jutaek," and low-rise apartment complexes, referred to as "villa," will be replaced with modern structures. To support this initiative, half of the development costs will be covered by low-interest loans provided to developers by the state-owned Korea Housing and Urban Guarantee Corp.
- Additionally, the government plans to offer subsidies for constructing community facilities, including parking lots, security systems, and fitness centers, to enhance the quality of life in these neighborhoods. Such government initiatives will increase the demand for HVAC equipment and services in the country.
- Moreover, the increasing demand for high-tech, energy-efficient, and high-performing HVAC systems is driven by homeowners who understand these superior systems' benefits. These informed customers value the importance of investing in systems that ensure better comfort, superior indoor air quality, and significant energy savings.
- Moreover, the Ministry of Land, Infrastructure, and Transport (South Korea) reported that in 2023, there were more than 4.5 million units of residential buildings in South Korea. The data indicated a minor rise in comparison to 2022. Residential buildings constituted approximately 62% of all buildings during that period.
