Despite various questions and doubts among people regarding “THE CONCEPT”, fractional ownership is seen by many experts as a very promising trend in real estate future market. If we talk about India, it is having huge potential to become the new normal and the future real estate within the next 5 years. Future of fractional ownership of holiday homes is likely to be influenced by a number of factors, including changing consumer preferences, advances in technology, and shifts in the global economy.
Here are a few potential ways in which fractional ownership of holiday homes is evolving as future real estate :
1) Continued growth:
Fractional ownership of holiday homes is a relatively new concept, but it has been gaining popularity in recent years and becoming a future of housing market. As more people become aware of the benefits of this category of property ownership, it is likely that the demand for fractional ownership of holiday homes will continue to grow on a high pace. As a fact, experts are forecasting, fractional ownership in India to surpass $5 billion in the coming years
2) Increased use of technology:
In the Vacation Rentals segment, 50% of total revenue will be generated through online sales by 2027 (Information Source: Statista). Advances in technology are making it easier for people to manage their fractional ownership properties and communicate with other co-owners. For example, online platforms are now available for managing reservations, making payments, and tracking maintenance needs. In future we may see more integration of AI and virtual technology in management of Fractional Ownership of holiday homes. The second benefit of increase in technology is that the owners are having the clear picture without involvement of any third party about how the property is performing with the help of various online tools like:
a) Property management software –
That allows owners to monitor and manage the property from a remote location. This includes tracking booking, maintenance and repairs, handling rental bookings, and communicating with guests.
b) Virtual tours –
With the help of 360-degree virtual tours, prospective buyers can experience the property from the comfort of their own homes, helping them make an informed decision about the purchase.
“As per the recent studies of Oxford University, 53% of the real estate industries are now bee lining straight towards technological investments, while 56% respondents believe the impact of Prop Tech has already surpassed their initial evaluation.” – (Source: Times of India)
Overall, technology has made fractional ownership of holiday homes more accessible, convenient, and attractive to a wider range of people, helping to drive its growth and making it real estate future.
3) Frequent expansion into developing Countries:
While fractional ownership of holiday homes is currently most popular in developed countries, it has the potential to expand into developing countries as well. This could open up new markets and opportunities for growth. Based on data from previous years, it’s safe to say that the fractional ownership market has seen steady growth over the past few years, driven by factors such as affordability, increased accessibility, and growing demand for second homes. In addition, the market has become more diversified, with fractional ownership providers entering new markets and offering a wider range of properties and ownership options hence making fractional ownership future real estate. Currently, the Indian restate market has been pegged at a $200-billion industry by the Ministry of Housing and Urban Affairs (MoHUA). The ministry further expects the sector to grow at an exponential pace in the coming years and become a $1-trillion industry by the year 2030 – Information Source Times of India
4 ) New Business Models with dual returns:
Fractional ownership is becoming a growing trend as a new business model for investing in a real estate especially in second homes, as it allows individuals to enjoy an attractive alternative for those who want to enjoy the benefits of ownership without the full financial and logistical commitment and the most amazing part is the Investment returns. Fractional ownership is likely to continue to grow in the coming years and keep on gaining the popularity among travelers and investors aswell due to the amazing returns the buyers get through capital gains and the rental income from the property. As per the recent study mentioned in Statista.com, Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 3.56%, resulting in a projected market volume of US$2.16bn by 2027 & The average revenue per user (ARPU) is expected to amount to US$37.06.
5) Investment from HNI’s
Climate change is likely to lead to more severe weather and natural disasters that could impact the value of real estate, including holiday homes. As a result, the future of real estate in fractional ownership of holiday homes may be affected by how well it can adapt to changing environmental conditions. HNIs are often among the early adopters of new investment opportunities, and fractional ownership holiday homes are no exception. Many HNIs see fractional ownership as a way to invest in a tangible asset while enjoying the benefits of holiday home ownership. Fractional ownership holiday homes are attractive to HNIs for several reasons. Firstly, they offer the opportunity to own a share of a luxury holiday home in a prime location, which would otherwise be unaffordable if purchased outright. Additionally, the costs and responsibilities of ownership are shared among multiple owners, reducing the financial burden. Furthermore, HNIs are often looking for new investment opportunities that offer both financial returns and lifestyle benefits. Fractional ownership holiday homes can provide both, as the value of the property can appreciate over time and the owners can enjoy regular access to the property for holiday vacations.“Nearly 30 per cent of total investors interested in fractional ownership of commercial real estate are NRIs as they seek to create alternative income source for family in India, according to a survey”
In conclusion, fractional ownership provides a unique investment opportunity that combines affordability, shared responsibility, increased accessibility, lifestyle benefits, and the potential for financial returns. These factors make it an attractive option for those looking to invest in vacation homes and are likely to drive its continued growth in the future. log on to BRIKitt to have more understanding and invest in the profitable future of real estate
