Shared ownership properties are going to “rebound more quickly and strongly than whole-ownership second homes as the economy recovers,” according to data released this week by fractional industry research firm Ragatz Associates.
Timeshares, vacation and destination clubs as well as other “fractional” private residence clubs are all being tipped as good bets to recover quickly says Ragatz.
Shared ownership vacation properties offer an increasingly attractive alternative to second home ownership says Oregon-based Ragatz.
The firm recently canvassed nearly 300 worldwide projects offering some form of shared ownership and found that the affordability and the way in which shared ownership property satisfies consumer demand for vacation convenience and flexibility make the fractional sector a perfect opportunity.
“We anticipate shared ownership to experience significant growth as the national economy recovers,” Michael G. Burns, President and CEO of Private Residence Resorts of Seattle told OPP.
His firm specializes in development and marketing of fractional ownership resorts and is currently selling a development in South Carolina called The Sanctuary located “close to two major vacation destinations … Hilton Head Island and historic Savannah, Georgia.”
According to Burns, “the typical vacation home is only owner-occupied three to six weeks out of the year. When one compares the costs of owning and maintaining a comparable second home, with that of a residence club, the true value of the fractional product speaks for itself.” And therefore, he adds, why buy one of The Sanctuary’s fully furnished, 3-bedroom / 3-bath lakeside homes outright when you can invest from $135,000 per owner? “Today’s consumer clearly sees the good sense in paying only for the time they actually get to use a vacation property,” he says. “It’s a very tempting premise to have an upscale vacation home without the on-going costs or hassles of whole ownership.”
Philip Mekelburg, President of Equity Estates Fund which also sells fractional property in the area, agrees, adding “even high net worth families who can afford purchasing a million dollar vacation property are finding it preferable to share this way.” And this view is backed up by official research which shows that fractional vacation ownership at some level has been a major economic driver in the Hilton Head area for more than two decades. Visitor & Convention Bureau statistics show 25% of all vacationers in the area are staying in some sort of fractional ownership property.
Hilton Head is part of the Marriott Vacation Club program (it has four timeshare locations on the island) and there is also a Disney Vacation Club on the island.
Another factor which will help fractional sector bounce back strongly is the ability of buyers to swap their time slots for other properties around the world. “The idea of exchange is an important consideration to the purchase decision by residence club buyers even if most don’t end up choosing to swap,” says Burns.
“That’s why The Sanctuary has partnered with The Registry Collection to offer owners the opportunity to exchange their time at luxury properties at many of the world’s most desirable destinations.”