HOT TOPIC � by Rebecca Michelle
Primary or secondary property: Which is worth buying?
So, which type of property stretches your Ringgit the most?
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 location?
Generally, 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 property market is usually divided into two categories: primary market and secondary market. The primary market consists of new properties, which include new launches and ongoing projects from the developer.
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-sale which will either be rented or owner-occupied by subsequent owners.
It is normal for industry outsiders to think that the primary market, or new properties, contribute to the most number of sales, due to the alluring advertising and marketing of new developments. However, contrary to popular belief, the secondary property market takes up 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.
Oh, so shiny! For starters, primary market properties are brand new, and therefore less money is required to be spent on renovation and refurbishment; some, if not all, units even come with basic furnishings such as kitchen cabinets and builtin wardrobes.
Primary property prices are usually set cheaper or at market value by developers, and in a soft property market, purchasers buying primary properties are most likely to enjoy good capital appreciation on the property, sometimes even before its completion.
Capital appreciation is what most real estate speculators look for, thus it comes as no surprise that they too, are among those who prefer primary market properties. Buying primary market properties straight from the developers at a low price and later selling it at an appreciated value in the secondary market drives them to make purchases.
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