Second homes or vacation homes

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Second Homes or Vacation Homes Category and its development in US & India

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Second homes or vacation homes

  1. 1. SecondHomesMarket for Second Homes
  2. 2. Segmentation of Vacation Home market internationallyVacationOwnershipProperty owned generally for personal useTimeshareA timeshare is a form of vacation property ownership.The use and costs of running the resort are shared among the owneVacationRentalsRenting out a furnished apartment or house on a temporary basis ttourists as an alternative to a hotelVacationExchangeYou trade your interval or week for new and different vacation experieat comparable resorts across the country and around the worldUnderstanding – Vacation Home
  3. 3. International Demand Drivers Economy Population Propensity to spend Income Levels Rate of borrowing Growth rate Attracting investment Government Initiatives ConferencesBaby BoomersInterest RatesKey movers of the Vacation Home marketTourism
  4. 4. Vacation Homes-InternationallySource: National Association Of Realtors 2006Desirable Attributes In A Vacation Home38%22%22%18%Close To Ocean/Lake/River Sporting ActivitiesClose To Resort Ares Mountains/Natural DestinationsLeisure Activities Preferred29%20%16%11%10%9%5%Water Sports Boating Hunting/Fishing Golf Biking/Hiking Skiing TennisTennisMode Of Purchase For A Vacation Home68%18%14%Real Estate Owners BuildersGolfKey Learnings: Internationally activities are critical aspects of Vacation Homes Brokers / real estate agents play a critical role as channel partners Locational advantage needs to be broadcast for individual property
  5. 5. Vacation Home Buyers: InternationalDistance (Miles) Vacation Home % Investment Property %25 44 6925-99 19 9100-199 22 5200-499 1 *500-999 3 31000-1499 * 61500 and more 10 8Median Distance 49 18* Less than 1 %Home Size (Sq.ft) Vacation Home % Investment Property %500 4 1501-1000 14 141001-1500 56 221501-2000 11 312001-2500 9 122501-3000 5 103000 and more 1 10Median Size 1290 1700Format California Coastal South Florida Golf Destinations Ski DestinationsStudio 600 600 700 NA1 BDR 590 600 550 5502 BDR 480 600 450 5803 BDR NA NA 400 600Premiums ($ 000) 50-150 50-300 50-150 50-100Distances between residence & Vacation HUsually less than 100 milesSize of home : 1000-1500 sqfAverage value per sq.ftSource: Economic Realtors Research
  6. 6. US Vacation Home Market• International Vacation Homemarket is maturing andseeing considerable growth• The US$ 13 billion VacationHome industry in US is0.10% of GDP as of 2005• Multiple players havingunlimited product offerings• GDP of US playing anintegral role for burst ofVacation Home industry020004000600080001000012000140001990 2000 200502468101214GDP (In Billion USD) Vacation home Industry (In Billion USD)Vacation Home market is growing @ 9.7% worldwide & @ 14% in U.SAlong with high growth rates comes heightened competitionBrands would soon start at exploiting other geographies0.05 %0.08 %0.10 %
  7. 7. • Given the current economictrends we can draw the followinghypothesis:- The Size of the Vacation Homeindustry is approximately US$0.757 billion or INR 34,150Crore• Experts predict the GDP growthrate to be close to 8%, the samewould see a rise in income levels– A factor which is one of the keygrowth drivers• Generation X will boost the growth of Vacation Homes in India•India the next growth driver for international companies01002003004005006007008009001990 2000 200500.10.20.30.40.50.60.70.8GDP (In Billion USD) Vacation home Industry (In Billion USD)0.05 %0.08 %0.10 %India Vacation Home
  8. 8. Disposable income 9 lac p.aOwns D/E segment carResiding in posh localitiesAverage age = 36-40CWE= Mostly MaleMarried and has kids42% live in joint families35% of wives working44% traveling abroad for vacation,at least once a yearIndian Luxury Consumer: HNI
  9. 9. Affluent Map Of IndiaPredominantly luxury consumers residein the north and westSource: Technopark
  10. 10. Vacation Home : Snapshot• Vacation Home• 100-200 kms from metros around a natural attractionprimarily hill stations, beaches• International Vacation Homes in Dubai, London etc.• Customers– HNIs & NRIs• Initial Value Proposition– Variety & convenience of one stop shop• Sustainable Value Proposition– Needs based development– Reach & access to NRIs– Destination development and marketing
  11. 11. Indian HNI : Primary TargetProducts• Vacation Home• Purchase/Lease of Commercial• Investment in Real Estate Funds/REITsCompetitive Landscape• Wealth Managers profferingEquity & Debt instruments• Dedicated sales teamrepresenting high value assets• Advertising & PR by builders &marketersNeeds• Prestige, Ego Value• High Service Quality• Large portfolio of options• Customized Advisory• Relationship Building• Credibility & AccountabilityOpportunities• Convenience of one stop shop forreal estate needs• Advice rather than push• Broaden the horizon to look atnew emerging opportunities likeequity involvement• Wealth Management perspective
  12. 12. NRI : Secondary TargetProducts• Vacation Home• Equity investment in Commercial , HotelReal Estate DevelopmentCompetitive Landscape• Wealth Managers proffering Equity &Debt instruments• Dedicated sales team representing highvalue assetsNeeds• High Service Quality• Large portfolio of options• Customized Advisory• Relationship Building• Credibility & AccountabilityOpportunities• Convenience of one stop shop for realestate needs• Advice rather than push• Broaden the horizon to look at newemerging opportunities like equityinvolvement• Reach to micro-segments
  13. 13. Key Success Factors• Direct Selling & Marketing for HNIs, NRIs– Dedicated sales and service team for HNIs / NRIs– Dedicated processes and systems to manage service & sales issues– Dedicated telemarketing & call centre support• Direct marketing strategy comprising ofinternet marketing and other channels• Pioneering new and exciting initiatives– Example :Halfshare.com specializes in the shared ownership ofluxury vacation properties throughout North America.• They help buyers find their ideal vacation property or Vacation Home whilematching them with the right co-owner through a Buyer Match Plan
  14. 14. Key Success Factors• Continuous inventory acquisition by adedicated team– Dedicated team to scout for projects under development,completed projects, re-sale inventory– Acquisition could be followed by• Re-packaging the real estate to make it more appealing to thetarget buyer• Sound Real Estate Knowledge Base– Ability to track trends and assess impact for HNIs– Ability to give a wealth management perspective and offer• Good Service Quality– Training & People development to offer good service experience– Personalized service to HNIs/NRIs– Robust processes for transaction management– Strong performance management system
  15. 15. Contact Us• Sarvajeet Chandra+91 9920803060,sarvajeet@theadiva.com,sarvajeetchandra@gmail.com• Visit Us at www.mastersungroup.com

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