The effects of administrative regulations on price competitiveness concerning private housing construction industry

Currently, at the end of 1996, with housing construction investment as high as 26 trillion won($29 billion) which takes up 6.7% of Korea's GDP and 31% of total investment in the construction industry, housing industry, as a single commodity, is the largest domestic demand market in Korea. Moreover, considering price-controlled initial sales prices the total market scale is much larger(currently estimated to be 37 trillion won);taking into account housing-related markets like furniture and interior design, its national economic effect on production, employment, and overall economic stability is enormous. However, now with the rapid rise in housing supply(currently 89.2%), the housing market has moved into a low-growth maturity phase; and recently, because of the accumulation of stock and the burden of heavy financial costs due to the longterm plan to stabilize the market after 1991, the housing construction industries regardless of their size are all suffering from severe financial difficulties, and even large companies are going bankrupt one after the other. (Sammick Co.in Oct.1995, Woosung Co.in Jan.1996, Kunyoung Co.in Aug.1996, Dongshin Co.in Dec.1996, Hanshin Co.in May 1997