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Commercial and Residential construction industries are two of the many facets of the construction industry. Both have their unique purpose, mode of construction, and management techniques. While commercial construction deals with the built-up environment for commerce-centric facilities, residential construction focuses on abodes.

Understanding the difference between the commercial construction and residential construction segments helps to avoid the concept of one-size-fits-all.

The article explains the eight critical elements that make commercial construction different from residential construction.

1. Use of Construction

Residential construction is associated with the construction of homes, villas, apartments, or any structure where people live. On the other hand, commercial construction is used for business purposes, which involves the construction of office buildings, industrial facilities, and any other associated business establishments. A commercial building in certain situations must serve the purpose of running different businesses in the same structure. 

The property owners and the tenants are the primary instructors in a residential construction project. But in the case of commercial construction, a new project is developed based on several business decisions. Hence, residential builders have a single contact for the project, but commercial projects liaise with several people or stakeholders.

2. Functionality of Construction

Commercial and residential construction serve different purposes. Residential construction serves the function of domestic use. Commercial construction has extensive functions. They include shops, warehouses, theatres, hospitals, local authority buildings, and many more.

As the functionality increases, the need for specific services like escalators, lifts, access controls, data, fire, protection equipment, lighting, and HVAC increases.

3. Materials Used for Construction

Residential projects mainly employ concrete and timber for their construction. Timber is a choice for an average homeowner. Residential projects have many options when choosing the right material for the building: smaller the projects, higher flexibility in material selection.

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Most of the commercial buildings are steel-framed. This way, the project justifies the cost and the investment using the steel. 

The commercial sector maintains a long-term relationship with the suppliers. This way, the materials in the project remain consistent. This nexus is weaker in residential projects. Hence the materials may cost more. 

4. Equipment selected for construction

Commercial projects are mostly large projects with larger buildings. Hence, the commercial projects require high-powered machinery, large cranes, and sophisticated equipment. 

Residential projects do not demand costly and complicated equipment. Generally, such extensive machinery and equipment are operated by well trained and experienced personnel, who cannot be seen in a residential project. The equipment and the particular workforce are justified by the cost of commercial projects, unlike residential projects.

5. Codes & Permits for Construction

Any construction project adheres to specific codes and permits concerning the associated municipality where the structure is built. But there are more codes and permissions required associated with a commercial project compared to a residential project. 

The level of complexity associated with commercial construction is high. This includes the safety factors, certifications, high and elaborated electrical systems, large parking garages, which itself has specialized codes. 

Residential projects have fewer elements to consider and control, which require lesser codes and permits.

6. Construction Project Deadlines

Whether it be commercial or residential construction, the builders and owners require their project to complete as soon as possible. When comparing the project deadline of both, the commercial construction tends to move fast compared to residential construction.

Commercial construction employs more workers and tools, as faster construction means low labor costs, and the project’s financial investment reduces. This adds time to the project.

In the case of residential projects, the number of workers employed is less. The owner tends to make more decisions throughout the project, which increases the time of construction.

7. Construction Work Pace

As discussed in the above point, commercial projects work at a higher pace compared to residential projects. The commercial project employs a larger workforce to complete the project deadlines. They have the space to incorporate ample resources and workforce to move the works fast. This hence creates a multi-tasking environment on the site, which improves the pace of work.

Residential projects work with less efficient workers and equipment than commercial projects, which slows down the pace of work.

8. Funding in Construction

The fund for residential construction projects is something that holds within the budget of the homeowner. Commercial projects are mostly public-funded and have a higher fund. As the scope of work for both the types varies drastically, the price also reflects this difference.

Generally, commercial projects are funded by:

  • Government agencies
  • Developers
  • Bank Financing Corporation

The residential projects are financed by:

  • Bank or Insurance loan
  • Cash
  • Non-profit or a government agency

Frequently Asked Questions

What is the main difference between industrial and residential construction?

Residential construction is associated with the construction of homes, villas, apartments, or any structure where people live. On the other hand, industrial construction is used for business purposes, which involves the construction of office buildings, industrial facilities, and any other associated business establishments. A commercial building in certain situations must serve the purpose of running different businesses on the same structure.
The property owners and the tenants mainly instruct the residential construction project. But in the case of commercial construction, a new project is developed based on several business decisions. Hence, residential builders have a single contact for the project, but commercial projects liaise with several people or stakeholders. 

What is the funding source for Commercial Construction?

Generally, commercial projects are funded by a government agency, A developer, or a Bank Financing Corporation.

What is the funding source for Residential Construction?

The residential projects are funded by- Bank or Insurance loan, Cash or Non-profit, or a government agency.

Read More:

  1. How to Estimate the Cost of Construction Project?
  2. Mechanization in Construction Industry – Motivations and Advantages

Neenu Arjun

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