Meet Luc Montens, the man behind Phuket’s Premier Real Estate Agency, Tropical Properties, as he speaks to us in an exclusive interview about the real estate market of Phuket, what a buyer can expect in the island and also about his journey from Europe to Phuket which now he calls his home.
Firstly, please give us a brief paragraph to introduce you and Tropical Properties.
Tropical Properties is one of Phuket’s Premier Real Estate Agencies. I and Annick Ameel started the business 11 years ago. We are now one of the most established Real Estate Agents in Phuket, and have guided a lot of customers through the property buying and selling process.
As a family business our philosophy is all about customer relationships. We do NOT just sell properties, but we recommend the right property to our customers based on their requirements and budget. We aim to get you that dream holiday home.
In brief please tell our readers about Tropical Properties and your work in Phuket?
Much the same as many other foreigners living and working in Phuket. We originally came here on a holiday and simply fell in love with the people, climate and culture. Once we returned to Belgium the seed was sown and we couldn’t stop thinking about Phuket. In 2001 we took the plunge and relocated.
I started by working for another established Phuket real estate business and then having set up and successfully run a key additional office we felt it was time to try and start our own real estate Phuket business. It was a gamble, but we’ve never looked back and I am proud to say we have grown our business through customer recommendations
Why, according to you, should one buy property in Phuket?
The tropical beaches and international lifestyle of Phuket are a winning combination. Phuket remains one of the world’s most desirable holiday destinations and a top choice for expats. It has a thriving marine industry which adds another dimension to the opportunities for leisure and tourism.
With international regattas, spectacular diving, and further development in the works, Phuket is growing rapidly as a destination for those who love the sea. The price of Phuket real estate remains attractive to international buyers and with developments continuing to be built, we only see the Phuket real estate market getting stronger.
Buying in Phuket is also a very good investment for those who do not only want a holiday/ second home in this tropical paradise. But also for those who, apart from gaining money on the healthy capital growth of their property, are looking to get generous rental returns. Demand for rental of villas and apartments from people coming on holiday has almost tripled over the past three years.
What is the current status of the Phuket real estate market?
Unlike in many other parts of the world, the property market in Phuket has not collapsed. Although it is true that sales have slowed down for a while due to the world economics, prices remained stable and have started to increase again over the past year. That does not mean that there are no good deals to be made. Most owners and developers are still willing to listen to any reasonable offers.
According to you where in Phuket should one look for a property? Why do you recommend these locations?
When looking where to buy, it is important for the buyer to know what his/her priorities are.
If the buyer is looking for a permanent home, very often they will opt for the more quiet areas away from the mass tourism, yet not too far away from the amenities. Then the east coast areas and some areas on the North West coast are often preferred.
When the purpose of buying is to get a nice holiday home, close to beaches, anywhere on the west coast will do.
When looking to maximize rental returns, then the area around Patong and nearby is the best choice. Not that it is not possible to get your property rented out in other areas. The average rental return on the island is around 5-6% per annum. Property in or close to Patong, however, can generate returns of up to 10% per annum.
What is the buyer profile that you usually see who are buying property in Phuket? Are they largely expats? From which country/ region do you ideally see buyers inquiring or investing in a property in Phuket?
Our buyers come from all parts of the world. The majority used to be Europeans. But since the crisis that has shifted. Most of our buyers are now Australians, expats from Hong Kong and Singapore. Over the past few years demand from countries like India, China, and countries from the Middle East have increased a lot.
Are most of these buyers just investors or they are buying to stay? What is the rough ratio between investors to residents?
Most of the buyers are people looking for a holiday home and investors looking to get rental income.
Some are buying now with the intention to retire here later. In the meantime they use it as a holiday home and rental investment. Only a small part buys to use the property as a permanent residence.
What are the property types that most developers in Phuket are currently offering?
There is something for everybody: From 30 sqm studio-apartments up to 10 bedroom luxury waterfront mansions.
Lately there has been an increase in offerings of smaller condominiums. This also has to do with the world economics as in the current market it is easier to sell a small condo for 3 million Baht than a luxury villa of 15 million USD.
For a buyer, what are the things one should keep in mind while choosing a property to buy?
First of all, as mentioned above, one must decide what the property will be used for. Once that has been established, the area must be considered. It might sound cliché, but the three most important factors when buying property are indeed location, location and location.
Can you name some good developers and their developments which are worth investing in? How does Tropical add value for the buyer instead of approaching the developer directly?
There are several good developers on the island, and naming only a few would be dishonest to those I would not name. So I shall refrain from that.
There are several reasons why buyers should work together with an agent instead of going it alone.
After being in this business in Phuket for more than 11 years now, we here at Tropical Properties have established good relations with all major developers and are being approached by a lot of owners who want to re-sell their property. Therefore, by using our services, buyers get access to a lot of stock that they would never know is out there if they would go property hunting on their own. And there are some real hidden gems out there.
Because we have these good relationships with the developers and sellers, and know all the ins and outs, we are best placed to get the buyers the best possible price.
We also have the knowledge to guide the buyers through the legal process, give advice about the several types of foreign ownership and what type of ownership is the best for their particular case.
When we get to the stage that the client actually decided which property to buy, we can recommend them one of the competent and reputable lawyers/international law firms that we have been recommending to our buyers for many years already.
Other than the property, what are the facilities/ amenities should a buyer look at when short listing properties to buy? What is Phuket as a place to live in contrasting with Krabi or Singapore?
As Phuket is not a huge island, you are never really far away from anything. There will always be a supermarket or shopping mall within maximum 15 minutes driving. There are two very good international hospitals, easy to reach within maximum 25 minutes driving from anywhere on the island. There are about 9 golf courses spread all over Phuket, and the international airport, with more and more direct international flights to all places in the world is maximum one hour driving away.
Phuket is lively the whole year round. Of course, there are less people around September, when it can get really wet due to the monsoons, than there are in December and January, when the sun is out in all glory.
Krabi on the other hand is virtually dead from April to November.
While I find Singapore a great place and a real shopper’s paradise, I find it too hectic and extremely expensive In Phuket I can afford the same lifestyle as in Singapore, but at a fraction of the cost.
What about the rates of property in Phuket? Can you give us the various price brackets and what a buyer can expect (or gets) in these price brackets?
As mentioned before, there is something in all sizes and for every budget.
What are the rules in Phuket for expats wanting to buy property? How difficult or how easy is it for foreign nationals to buy a property in Phuket?
It is important to know that the property market in Phuket is a dominantly foreign driven market. About 95% of all properties are purchased by foreigners. I have been in this business here in Phuket for 11 years now, and 100% of my clients are foreigners.
So it is not difficult at all for foreigners to buy and legally own property in Phuket. There are restrictions to land ownership for foreign nationals. But foreigners can get long-term leases on land plots, and the leases are structured in such way that they virtually become the same as freehold properties.
Condominiums can be purchased as foreign freehold properties, owned in the buyer’s personal name.
What are the residency rules for foreign nations to stay in Phuket? What are the different visas available for long stay?
The most common visa for people wanting to stay longer than 30 days in Thailand is the tourist visa. That allows them to stay 90 consecutive days. That visa can be obtained at any Thai embassy or consulate.
People who are 50 years and older can apply for a retirement visa. This allows them to stay the whole year round. The visa must be renewed every year.
In terms of appreciation, how do you see an average Phuket property in the next 5, 10, 15 years?
Up to 2008 prices were increasing with an average of 25% per year. The world crisis made an end to that. After staying stable for a couple of years, we are now seeing increases of 5-10% and up to 15% per year for some properties in good locations that are much in demand.
Anything in a good location and anything with a good ocean view will always be high in demand. Therefore, these types of properties will always get the best returns and resale value.
Do you handle rentals? What kind of yields are you seeing on long term and short term rentals in Phuket?
We do handle rentals. As explained above, demand has almost tripled over the past couple of years and it keeps increasing. Rental returns are about 5-6% on average with exceptions for the areas in and around Patong which can generate up to 10% for properties in a good location with the right facilities like swimming pool, gym, lobby etc.
How should any of our readers get in touch with you in case they are interested to discuss this further?
Readers can reach me on my email at firstname.lastname@example.org or on my mobile: +66 87-88 22 856.