Fractional Ownership News
Report reveals potential $9 billion fractional real estate market in Australia and New Zealand
A new report in to the potential fractional real estate market in Australia and New Zealand says the sector there could be worth a minimum of US$9 billion, and potentially considerably more.
The Australia and New Zealand Fractional Market 2010 report was commissioned by fractional real estate exchange programme The Registry Collection, and compiled by Ragatz Associates, Bergent Research and Baker & McKenzie.
It begins by saying that although fractional ownership is established in the US and growing in Europe, in Australia and New Zealand the industry is moving more cautiously due to developer uncertainty over the potential consumer take up of the product; confusion or inexperience in tailoring the right fractional offering for the market and confusion over the stringent compliance and corporate governance regulations that apply under Australian law.
Charisse Cox, managing director of The Registry Collection- Pacific Region, said: “This report provides insights from the leading companies within their respective fields that answer these concerns. With this information in hand, there is no reason why developers here cannot capitalise on the huge profit potential that the fractional industry can bring.”
In compiling the report, Bergent research spoke to spoke to 400 prospects, all of whom had differing levels of knowledge of fractional real estate. The average respondee was wealthy (with an average annual household income of $215K before tax) and aged between 40 and 59 years of age.
Six out of ten prospects were familiar with fractional ownership, and on average more than 70% of active and undecided prospects believe fractionals are a viable alternative to other holiday accommodation. Interestingly even more than 1/3 of the passive respondents still believe fractionals are a viable alternative.
Ski, winery and urban fractionals all have significant potential in Australia and New Zealand The report stated: “As with any property purchase, the product and location needs to be right. FF&E needs to be of a standard that these consumers have come to expect. There is no surprise in the preferred locations being beach holidays, but this doesn’t mean other holiday destinations should be discounted. We believe there is a large market for ski, winery and urban fractionals within Australia and New Zealand. The fractional prospects are also telling us the ability to exchange weeks for holidays in other destinations is a key attribute to the offering.”
When asked about favoured locations, major holiday destinations held the most appeal for a fractional property In Australia, Queensland (59%) is the most popular region, with top locations being the Gold Coast (19%) followed by Sunshine Coast (15%) and Far North QLD. Other popular locations were New South Wales (16%), Western Australia (12%), Victoria (7%), Tasmania (3%) and Northern Territories (2%).
In New Zealand, the favoured locations are, in the North Island: Bay of Islands (16%), Bay of Plenty (9%), Auckland (4%) Wellington<
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