Harris/Decima looks at Canadian condo buyers

Gary Carter of Resort Owner's Group

TORONTO—So who is buying all those vacation condos going up in places like Canmore, Whistler, Kelowna and Collingwood?

A Harris/Decima study in the recreational real estate sector, conducted last month, found that of the 1,004 people included in the survey, 14 per cent currently own some type of recreational real estate asset. Within this group, 57 per cent are sole recreational property owners and 43 per cent have invested in shared ownership assets, including timeshare or fractional ownership properties.

Owners of recreational real estate are predominately high income earners ($100k plus) and over 40 years of age.

The survey also found that 36 per cent of those who are sole owners purchased their property prior to 1990, whereas 43 per cent of timeshare investments are fairly recent and occurred in the 90’s while fractional ownership investment is even more recent with most acquisitions made since the year 2000.
 
Canadians who own recreational real estate tend to be much more frequent travellers than those who do not. While one third (31 per cent) of Canadians travel nationally only once per year the trend is higher among those who expressed interest in owning recreational property.
 
As many Canadians (30 per cent) take one trip per year on average to the U.S., however, owners of shared recreational real estate properties (42 per cent) and those interested in shared ownership travel to the US more often.

A group of 300 respondents (or 30 per cent of the total population in this representative survey) indicated they are interested in purchasing a recreational property. Peak purchase interest among these potential recreational real estate buyers is predominantly focused on sole ownership assets: 71 per cent are interested in acquiring sole ownership properties; 15 per cent are interested in timeshare; and 14 per cent are interested in fractional ownership.

Though visiting family prompts many Canadians to travel, vacationing for pure leisure and enjoyment is quickly catching up.

The beach, sun and sand reign supreme when it comes to desirable amenities that can close the deal.  Half the owners (48 per cent) in the survey prefer to be near the beach and almost as many (46 per cent) want retail facilities nearby.

An Executive Summary Report containing further findings from this study will be available at the Canadian Resort Investment Conference on October 14th and 15th 2008 in Kelowna, British Columbia.

BuyWithFriends.com

While the study found that only 14 per cent of those surveyed were interested in fractional ownership, it also found that fractional ownership is a relatively recent phenomenon, with most fractional owners purchasing their properties since the year 2000.

Gary Carter of Resort Owners Group (ROG) has come up with a model of fractional ownership that should solve some of the problems of fractional and residential ownership.
It’s called “assembled ownership”, and is also known by the catchier title of ROG’s website, “BuyWithFriends.com”.

Carter, an avid skier and golfer, came up with the concept back in 1992 when he and a group of seven other friends decided that instead of renting a place when the eight of them went on the annual “guy’s week”, they should look at buying one. They bought a golf villa together in Scottsdale, AZ.
 
Then Carter came up with the deal that set the stage for ROG.  He said that he would manage the deal, if each of the friends gave him a week and a half of their time. The deal separated ownership from time, and allowed Carter to rent out his extra weeks.
 
Clearly shared ownership made it very affordable, plus the developer had arranged conventional mortgage financing adding to the affordability.  All of the owners shared the normal operating costs, with Carter managing the process.

Fast forward to today.  The Resort Owner’s Group has invested $3 million in legal, operations and alliances to grow the model globally, and says it is the only non developer resort home ownership platform with national sales alliances, multiple resort locations and flexible ownership options.

The concept offers a number of advantages, says Carter. “You have the pride of ownership since you own the whole home.  You have the added benefit of knowing that in one to five years it is easier to sell the whole home through Real Estate MLS systems.”

But the biggest advantage is ROG’s stacking feature, which  allows all BuyWithFriends owners in one home to get several homes during the same week when they want. This is made possible by ROG’s inventory of exchangeable weeks.
 
Each owner is free to use, rent (optional) or exchange their weeks within ROG’s three expanding exchange networks. The three exchange networks include ROG managed locations, Intrawest’s R2R locations and Group RCI locations in over 60 countries.
For developers, ROG is a fractional ownership solution provider, providing a “complete turnkey” fractional ownership selling solution model that includes the front-end, middle and back-end asset management of every resort home.