42 | AGENT PROFILE WORDS | Sean Lightbown
BUSINESS
www.opp.org.uk | MAY 2012
Full of eastern promise
While mainland Thailand’s property market has suffered recently due to devastating fl oods, the island of Phuket has carried on performing very strongly indeed. How and why is Phuket bucking the trend, and what opportunities are there for the overseas property industry? OPP has been talking to Tropical Properties managing director Luc Montens (pictured, below) about the state of the market and getting his agency’s view on the future of the region.
devastating the country, the island resort of Phuket has received a bounce of visitors and buyers. A survey for the Agency of Real
D
Estate Affairs revealed that last year 114 property projects were launched on the island in 2011. This was made up of 6,216 units, worth in the region of 91.41 billion Thai bhat (roughly $2.94 billion dollars).
And, as real estate grows strongly in
the area, so do visitor numbers, according to Luc Montens, managing director of local agency Tropical Properties. “Tourism is booming,” he says. “2011 saw a record breaking number of arrivals at the airport of more than
espite well-documented problems on the Thai mainland with fl oods
four million people. The fi rst quarter of 2012 has already surpassed the number of the same time in 2011.
The airport is now being expanded and renovated to be able to receive double the number of visitors by 2015.” Foreign real estate buyers are
more than crucial to the market says Montens.
“It is important to know that the property market in Phuket is a foreign- driven market. About 95% of all properties are purchased by foreigners.” “In all the time I have been in this business here, I’ve had one Thai buyer. All the rest were foreigners.” Part of the reason for this is the easy way foreigners can acquire land. “There are some restrictions regarding foreign ownership of land.
Taking your chances
Luc Montens, Managing Director Tropical Properties
Why did you decide to sell overseas property in the area? How did you get into the business? I entered this business purely by coincidence. I never had the intention to come here to sell property. But after I had been here for a bit more than two years, the industry started to take off , and I got invited to join an agency. I was doing great, and was made responsible to start up their second branch on the island after less than one year. Once that was up and running I thought it was time to move on and I decided to start my own business.
Do you sell whole/ownership or fractional units? We do not sell fractional ownership. Some companies have tried it (and some still are) but it never took off . There are too many similarities to timeshare which has a horrible reputation (and rightfully so in most cases).
What media do you use to generate sales leads? Our main tool is our own website, but we also list on portals and advertise on some websites.
Do you sell properties to investment fund buyers? For many buyers the property here is an investment which they use as holiday home and to generate rental returns. Some buy at an early stage and try to resell with profi t once completed or nearing completion.
Are there any current threats to your business? The world is watching the Euro zone and many people are holding back their investment here in Phuket (and elsewhere in the world) because of the threat the Euro could collapse. That is about the only uncertainty and threat.
But it is possible to legally acquire control of a land plot through registered leases and such.”
For Montens, the crisis has taken away a lot of his European market… however, this has brought new money to the fore. “There are buyers from all over the world,” he says. “In the past few years, Australians have made up the majority of our buyers. It used to be the Europeans ... but things have shifted since the 2008 crisis.” “We still get a lot of European ex- pats from Hong Kong and Singapore. Lately there is increased interest from Mainland China and India.” Where are people buying? “Everywhere really,” Montens says. “But the west coast remains the most popular because of the resort areas
and beaches.” However, there is also investment reasonining behind purchases he says.
“Many buyers want to get rental
returns. And the returns are better on the west coast than in the other parts, because this is where the tourists (short
“Since the crisis there has been much more interest in re- sale properties.”
term lettings) are coming to.” “The most popular place is Patong. Patong is world famous for its beach, shopping venues, restaurants and last but not least, the nightlife. Also Karon and Kata are popular, especially with the Scandinavian people. Kamala is attracting a lot of ‘high end’ visitors and has a lot of exclusive properties along the headland also known as ‘Millionaire’s Mile’.” In particular, he says that there has been a role-reversal in terms of demand for re-sale and off-plan developments. “We are selling all types of properties all over the island and in all price ranges [but] since the crisis there is much more interest in re-sale properties than before.” “ Buyers are reluctant to put their
money in off plan or early stage developments because of the risk involved. Before the crisis off plan/ under construction developments were very popular and there were also hardly any re-sales available.” Martens is optimistic about what
the rest of 2012 holds, too. “I expect the market to improve
this year,” he says. “The first four months have been significantly better than last year. Of course, this will also depend on how the world economy will perform, and how exchange rates (especially for the Euro) will evolve.”
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