Words: Ashley Rigg
Published: 30th March 2011
*Industry rejects fractional but embraces off-plan and UK buyer market
Off-plan is dead…long live fractional. That has long been the cry of many a fractional consultant, as they relieve developers of their hard-earned cash.
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Source: Global edge
User Comments
To my opinion this indicates again that with a survey like this, Global Edge shows instantly a better understanding of the current situation than unfortunately mentioned in many other media sources.
As much as information and figures like these are of extreme value to the industry, so obviously is the job of Global Edge for which I thank them!
Rene Mulder,
2ndHomes International
Piers,
It is a good point. Actively may be a strong adjective in this case.
We asked what agents were selling and how sales compared to last year in each category.
Interestingly all but a few agents said they expected to sell at least 5 units in total this year.
In my experience, there is always a difference between what people say in a survey and what they do in practice. If anything people tend to exaggerate where sales are concerned.
I still believe however that survey's such as this have value. It gives an idea of what people are selling and what they are not.
Agents tend to be the most important channel for developers in our market and I believe the conclusion that they have not yet embraced fractional is both valid and important.
Ashley Rigg,
Global edge
71 agents (20%) "actively selling fractional" - I'd love to know who? and what is the author's definition of 'actively'. Also, what constitutes a fractional real estate product? In my view fractional sales are being achieved by individuals / companies passionate about the product and its benefits. I can count on one hand the fractional agents I trust to deliver sales.
Piers Brown,
Fractional Life
The title might be a little miss leading as Fractional Ownership products have never been effectively sold by third party agents (apart from pure financial products like SIPPs sold through IFAs).
Fractional Ownership and Private Residence Clubs are most effectively sold by a dedicated on-site sales and marketing team who understands the product in great detail and can sell the life-style aspect of the product.
I am not surprised if real estate agents finds it difficult to sell Fractional Ownership as this study shows but this does not change the fact that Fractionals can be a very valid product for developers - in fact a combination of whole ownership and fractional ownership can in some developments be very effective.
Although we cannot fully compare the European markets with the US, the latest Ragatz conference revealed that Fractional Ownership in the US in 2010 declined 38% compared with 2009. In the same period whole ownership vacation homes declined 60%. So maybe the Fractional Ownership product is still a relevant consideration for some developers?
Preben Vestdam,
Valhalla Associates