A report recently published by fractional industry expert Dr. Dick Ragatz revealed a potentially lucrative $9 billion fractional real estate market in Australia and New Zealand. The Registry Collection, the world’s largest luxury exchange program and one of the Wyndham Worldwide family of brands under the RCI® umbrella (NYSE: WYN), commissioned the report to provide insights from leading companies within the fractional market to local property developers. The report includes the first-ever consumer research study on the fractional product in Australia and New Zealand conducted by market research firm Bergent Research.

According to the report, the survey findings “prove that there is a market for the fractional product in this region. Savvy consumers appreciate the fact that the fractional product minimizes the capital outlay and maintenance hassles typically attributed to whole ownership property purchases. They also enjoy the flexibility that external exchange companies such as The Registry Collection program can offer in providing fractional purchasers access to a variety of high-end properties in key destinations around the world.”

  “The fractional industry has proved to be one of the success stories of the resort real estate industry internationally,” said Charisse Cox, managing director of RCI Pacific.

“During the property boom between 2001 and 2007, the industry in America grew at a rapid pace, outstripping the growth of the traditional whole ownership industry to reach sales in excess of USD$2.3 billion at its peak,” Ms. Cox continued.

“Many experts believe that consumer demand for fractional properties will continue to outstrip demand of second home ownership, especially as investors become more selective with their expenditures.”

According to Ms. Cox, the fractional industry in Australia and New Zealand, however, is moving more cautiously.

“We believe there are a few reasons for this including developer uncertainty over the potential consumer take-up of the product, and confusion or inexperience in tailoring the right fractional offering for the market,” Ms. Cox said.

“However, with the information that this Fractional Industry Report provides, there is no reason why developers in the Pacific region cannot capitalise on the huge profit potential that the fractional industry can bring to our region.”

The report states that “there is a market for the fractional product within Australia and New Zealand, and there is an opportunity for developers to earn increased profitability if a fractional offering is conceived and developed correctly.”

The Registry Collection program is poised to provide local developers with the information they need about the fractional market. The Registry Collection program was the gold sponsor of the inaugural Fractional Real Estate Essentials conference, held as a pre-event to the annual Australia, New Zealand & Pacific Hotel Industry Conference held recently in Sydney.

The fractional ownership model is advantageous for both consumers and developers. It works for consumers as fractionals lower the price point so that they can purchase a property of much higher quality than what they could otherwise afford and without the responsibilities and inconveniences of owning and maintaining a second home. The model also allows purchaser to buy only what they have time to use. It works for developers too since fractionals broaden and diversify the market by creating lower price points and usually result in higher profitability when properly conceived and executed.