Dubai (PRWEB) March 31, 2009
Property on a worldwide scale has plummeted and sales resistance grows from consumers. One new trend that some developers are turning to is to repackage a luxury residence into a fractional ownership offering, allowing each smaller investor the opportunity to have real equity in a vacation home in destination resorts such as Dubai. Michael J. Tolan explains...
Fractional Ownership Provides Potential Boom in Recession
As property values plummet, fractional ownership offers developers and consumers a breath of fresh air. Consumers get real value, and developers are able to appeal to a wider audience, making the whole package affordable and profitable for all parties.
Is Dubai Real Estate set to Boom again through Fractional Ownership?
In the wake of the global financial crisis, real estate has taken the brunt of the consumer chill.
Surveys indicate that many end users are simply waiting for the prices to fall further, while some indication is the fractional ownership space will actually enjoy a renaissance.
Many developers in areas such as Dubai and even Cyprus have been hit hard as projected values have plummeted and financing has dried up.
Fractional ownership may be one formula that offers a win-win to the developer and consumer.
First of all the consumer will acquire a luxury residence for the time of year they could actually use it, while sharing the capital outlay with up to 12 other families, who in turn, own a real slice of the equity in the asset.
Properties using this scheme that provide hotel style management will cater to the wishes of consumers who only want to see their investment grow over the years, while enjoying the usage of their vacation home annually.
Unlike timeshare, fractional ownership actually provides an easy exit clause, should the buyer wish to sell on at a later stage, with a long term view of having the property increase in value. The caliber of properties that will enjoy a renaissance must be top end in design and amenities, said Michael J. Tolan,Ceo of World Class Group.
The property should be a location of desired annual vacations and other areas such as Malaysia and Thailand also hold much promise.
The developer has the opportunity to open up a market never before available, and by dividing the cost of the asset to more members or property partners, makes it more saleable and much more attractive. This requires a unique marketing formula than traditional real estate, but the rewards are appetizing.
There are various legal schemes to apply these principles, and consumers should insist that an independent trustee is in place to protect the covenant of the agreement throughout the duration of the ownership.
"Fractional Ownership could be the answer that provides both developers and consumers with the perfect formula for today's appetite for value for money, and a fabulous lifestyle option." added Tolan.
Michael J. Tolan is a consultant based in Dubai, with over 15 years of shared ownership experience. He is CEO of World Class Group.
For further information, contact: 00971 50 157 2321