When it comes to purchasing a residential property, the common question that comes
to mind is, do I buy a new property or search for secondary property in a specific
In most cases, people buy a residential home for property investments before buying it
to live in. So, as someone who is looking to buy a residential home to live in, what are
the options out there?
The real estate market is usually divided into two categories: the primary market and
the secondary market. Let’s look at the difference between both.
Real estate Primary sales mean when a real estate builder sells the housing units or
commercial units to the investor or end-user in the primary market. It is the first sale
for that particular unit. Which include new launches and ongoing projects.
A real estate developer will form a network of channel partners to sell housing or
commercial units that the developer is building. These channel partners will promote
the properties on behalf of the real estate developer, thereby generating leads and
then closing the deal.
The secondary market is made up of secondary or sub-sale properties, previously
owned houses in matured locations, and established residential areas. To further
elaborate, secondary properties are properties that have been introduced into the
market for rental or sub-scale which will either be rented or owner-occupied by
The fundamental role of the secondary market is to facilitate a change in ownership at
the appropriate price of an existing asset. This implies that the secondary market
becomes significant as it provides the liquidity which is needed in order to further
strengthen the functioning of the primary market.
It is normal for industry outsiders to think that the primary market, or new properties,
contribute to the most number of sales, due to attractive advertising and marketing of
new developments. However, contrary to common belief, the secondary property
market accounts for the bulk of the volume of residential property transactions, as
opposed to the primary property market. This is mainly because the secondary
property market offers more choices in already established locations.
Here is a list to illustrate the pros and cons of both primary and secondary properties.
- Latest design
- Lower entry level
- High margin of finance
- Better choice of lots/units
- Capital appreciation
- 2-3 years for completion
- Lower initial rent
- Possibility of abandonment
- Initial furbishing cost
- Immediate rental return
- Established location
- Old design
- Repair / Maintenance
- Price increase
Types of Real Estate
There are four types of real estate.
Residential Real Estate
Residential real estate is an area developed for people to live in. It includes both new
construction and resale homes. The most common category is single-family homes, but
it also includes duplexes, high-value homes, multi-generational homes, and vacation
As defined by local authorities, residential real estate cannot be used for commercial or
industrial purposes. It also restricts how many buildings are allowed on a single block
and what kinds of municipal services reach those buildings.
Commercial real estate
Commercial real estate (CRE) is a property that is used exclusively for business-related
purposes or to provide a workspace rather than living space. Most often, commercial
real estate is leased to tenants to conduct income-generating activities. This broad
category of real estate can include everything from a single storefront to a huge
Commercial real estate includes shopping centers and malls, medical buildings,
educational buildings, hotels, and offices.
Industrial real estate
Industrial real estate refers to properties used to develop, manufacture, or produce
goods and products and logistics real estate that supports the movement and storage
of products and goods. Industrial real estate includes manufacturing buildings and
storage like warehouses. Industrial property can only used for industrial purposes.
Luxury residential real estate
It’s crucial to understand the features that characterize luxury property before you
invest. A high price tag alone won’t put a property in this category. “It has to be unique
and exclusive in a good way, in a desirable way,”
A luxury home is all about grandeur. And the splendor shouldn’t be confined to your
living space, but it should also be seen in the locality where your home is situated.
Luxury property should have good project layouts, more open and green spaces,
natural lighting and ventilation, and a trove of lifestyle amenities. Consequently,
features such as swimming pools, balconies with expansive views, game rooms,
gymnasium, recreational spaces, etc., are now a part of the ‘expected product’ being
offered to buyers by reputed developers.