Why have big construction companies replaced real estate developers in Korea?

This study examines the relevance of a developmental state for the current inactive presence of real estate developers in Korea. During its period of economic development, Korea's developmental state played an exclusive role in large-scale land supply and placed strict price controls on new housing which consequently curtailed the entrepreneurial role of developers. Moreover, the state's deliberate restriction of capital flowing into the real estate industry has left developers with no choice but to rely upon their own capital. Therefore, big construction companies that had the necessary financial strength were well suited to act as both developers and builders, maximizing profit from massive physical construction and controlling costs through maintaining minimum quality standards. This study argues that as the developmental functions of the state weaken, the industry will experience a growing professionalization of real estate developers, particularly with the increasing availability of capital that would trigger development.