RESORTS: Shared Ownership Investment Conference

Ross Perlmutter of the Canadian Resort Development Association with John Sanginesi of Interval International at the Shared Ownership Investment Conference held last month in Orlando, FL.

ORLANDO, FL—Canada felt the recession less deeply than the United States, which provides both good news and bad news for the shared ownership investment industry, said Ross Perlmutter, president and CEO of the Canadian Resort Development Association.

“Our recovery has left us in tremendous shape,” he told CLN at the Shared Ownership Investment Conference hosted by Interval International in Orlando Oct. 17-19.

“The bad news is that it has given us a lot of international purchasing power, and it’s a struggle to keep [investors’] eyes on Canada and realize the value of shared ownership and fractionals in this country.”

Certainly, Canadian buyers are attracted by bargain prices in southern climes that suffered more in the recession.

Erika Garcia, CEO of Mexican Riviera Resorts Unlimited, noted that their customer base has switched from 80 per cent Americans to 80 per cent Canadians in the past three years.

“Your gain is our loss,” Perlmutter told her.

But many Canadian buyers are still seeing the advantages of owning a share of a Canadian property, Perlmutter noted.

“The average price per square foot in Canada is one third of what similar U.S. shared ownership products are selling for, and land prices are about equal in Alberta and Montana. Canadian shared ownership products are a relative bargain.

“Real estate appreciation in Canada has had the net effect of more equity in houses, and Canadian consumers picking up high end leisure products. Their leverage and lines of credit are bumped up because of the equity in their homes.”

He added that Canadians don’t have a lot of risk tolerance, which means they don’t mind using their home equity, but not to gamble.  They view investments in Canada as safer—though they still like exchange programs that give them an option of going elsewhere.

John Sanginesi, Interval International’s director, resort sales and service with responsibility for Eastern Canada, said that 2011 sales have been flat overall, though they have picked up in the past few months, thanks in part to beautiful weather in Ontario cottage country.

Interval has now expanded into the Atlantic Canada market with two resorts in Cape Breton, NS.  These are the Kildare at Bell Bay [golf course] and Ingonish by the Sea.

“These are two beautiful resorts, one on the Bras d’Or lakes and one on the Atlantic Ocean,” Sanginesi said. “It open up the market east of Quebec.”

Both resorts are owned and managed by Scott MacAulay, owner, Cape Breton Resorts in Baddeck, NS.

Echo boomer market

Perlmutter sees the echo-boomer generation as a promising market for boutique shared ownership products in the years ahead.

“Our Ipsos-Reid study showed extremely strong interest in shared ownership among the 25- to 35 year-old echo boomers,” he said.

“Generation Y is an underserviced market. I’m surprised at the level of interest. We’ll have to really rethink how that group is being serviced.  They are very different from the baby boomers.”