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Phuket: The top region for real estate investment — Seven proofs

Phuket offers everything real estate investors are looking for. The area's booming economy, bolstered by billions in tourism revenue, strong currency, and shortage of land create a stable environment for long-term investments. Development projects from the world's leading brands, flexible terms of transactions, profitable rental programs with high returns enhance the potential for maximizing profits.

These factors position Phuket as the leading region globally for real estate investment. The evidence is in our review, prepared jointly with experts from the Thai real estate agency Exotic Property.

Growing Economy

The success of real estate investments is closely tied to the economic health of the location. Thailand has shown impressive resilience and growth in this area. Recent findings from Deloitte's "Thailand’s Economic Outlook, 4Q2023" report indicate a swift recovery from the coronavirus crisis. Although the economy dipped in 2020, it has been on an upward trajectory ever since. Both the International Monetary Fund and the Bank of Thailand predict a growth rate of 3.6-3.8% by the end of 2024.

The primary driver of prosperity has been the hospitality sector. From the beginning of 2023 until October, foreign tourists have brought 939 billion baht (approximately $25.7 billion) into Thailand's economy. Phuket alone has received $8.5 billion, a significant portion of this sum.

For foreign investors, an attractive feature of Thailand's economic environment is the stability of the national currency. The Thai baht has maintained a consistent exchange rate to the dollar for the past 20 years, ensuring steady returns on investments in Phuket real estate.

Svetlana Kasatkina
Managing Partner

When you rent out apartments through an official management company or a hotel operator, the revenue is usually paid in the local currency and deposited into a bank account. If you opt for private arrangements, the terms vary based on your agreement. The exchange rate for the dollar has been stable, ranging from 33-35 baht, just as it was a decade ago. This rate slightly decreases in summer and increases in winter, making it a reliable currency for savings. Unlike some regions, here we primarily use multi-currency bank accounts. You can deposit dollars, euros, yuan, and other currencies, which are then converted into baht at the current exchange rate.

Tourism Potential

Phuket currently welcomes between 500,000 and 700,000 visitors monthly, benefiting from its proximity to large tourism markets like China, India, and Malaysia. The influx of Russian tourists has surged by 130% in 2023, fueled by direct flights and an extended visa-free period of up to 90 days. Additionally, European, American, and Australian tourists continue to visit in strong numbers.

The forecasts indicate a significant rise in tourist numbers. In response, Phuket authorities are developing a second airport in Phang Nga province to accommodate more direct international flights, ensuring Phuket remains a top destination.

Phuket is appealing not only to vacationers but also to long-term expatriates who choose to retire, enroll their children in local international schools, and work remotely with global clients.

It’s crucial for foreign investors to recognize that Phuket enjoys a consistent influx of tourists throughout the year, unlike some other destinations with marked seasonal variations. According to Knight Frank, the average occupancy rate for apart-hotels in the region stood at 81% for the first half of 2023, a figure that rarely exceeds 70% in many European locations.

Svetlana Kasatkina
Svetlana Kasatkina
Managing Partner

I can provide insights from Exotic Voyage, a tourism company within our group. This past winter, Phuket's hotels were fully booked, forcing us to accommodate tourists in mainland areas like Khao Lak and Phang Nga. These neighboring provinces, connected by a bridge to the island, offer more affordable accommodation options—often at half the price. They are particularly appealing for families with children. The availability of hotel rooms in these less-known regions helped us manage the overflow from Phuket, where there were no vacancies.

Phuket

Land Scarcity

Phuket faces a significant shortage of accommodations for tourists, primarily due to limited available land and strict regulations on high-rise construction. The cost of land in prime locations has surged by 100% over the past two years, according to the Bangkok Post. However, this scarcity presents a unique opportunity for private investors.

By investing in an apartment in Phuket, investors can be confident of two key advantages. First, their property will be in high demand by tourists. Second, the limited competition allows for maintaining strong rental or resale prices, avoiding the need for price reductions.

Svetlana Kasatkina
Svetlana Kasatkina
Managing Partner
Exotic Property

Phuket is a small island. 70% of its territory is occupied by mountains, nature reserves and farmland, where nothing can be built at all. The narrow strip of buildable land along the popular western coast beaches is nearly fully developed. In addition, there are restrictions on the height of buildings. Purchasing apartments close to the sea—on the first or second line—offers potential for medium-term gains.

Development is now expanding three to five kilometers from the beaches, where large developers are introducing residential complexes along with necessary infrastructure. This shift offers an attractive investment opportunity. Such properties attract expatriates planning long-term stays, with schools, hospitals, and shopping centers nearby, and the sea just a short drive away.

Quality Complexes

Phuket is celebrated for its high-quality construction, evidenced by the substantial presence of branded real estate projects on the island. Renowned brands such as Hilton, Radisson, Best Western, Wyndham, Renaissance, Sheraton, Movenpick, and MGallery offer properties here.

According to Savills, Phuket ranks among the top five global regions in the number of operational and planned branded complexes, surpassing even London in this category (Branded Residences, 2023).

A prestigious brand not only ensures quality construction but also guarantees top-notch services, including maintenance and rental management.

Svetlana Kasatkina
Svetlana Kasatkina
Managing Partner

After the pandemic, the demand for real estate in Phuket has soared to levels not seen in years. In response, developers have been quick to act. Prominent companies from Bangkok, new to the island, have initiated projects here. Additionally, developers with Russian and Chinese investments have become significantly active. The competition among them has spurred innovation in design, layout, and services, making the current offerings exceptionally appealing. We invite you to contact us to explore some of these unique projects.

Examples of real estate in Phuket
Apartment for 131 230 euro on Phuket Island, Thailand
131 230 €
Apartment on Phuket Island, Thailand
49 sq.m 1 2
In the complex: on the roof of each condominium there is a charming swimming pool, where you can relax on the sun beds, enjoying the view of Pang Nga Bay. A children's club with water slides and a mini aqua park, the best sports club on the island with tennis courts, SPA, wellness center, rejuvenation institute, restaurants with international...
Exotic Property
Apartment for 130 667 euro on Phuket Island, Thailand
130 667 €
Apartment on Phuket Island, Thailand
55 sq.m 1 1
In the complex:The project is distinguished by the unusual design of the building itself - in the form of a ship surrounded on all sides by a swimming pool. There are 7 floors in total, studio apartments, 1 and 2 bedroom apartments. The whole complex consists of three detached buildings of 5-7 floors, a communal swimming pool, a restaurant, a...
Exotic Property
Apartment for 65 082 euro on Phuket Island, Thailand
65 082 €
Apartment on Phuket Island, Thailand
44 sq.m 1 1
The complex has 2 seven-storey buildings, a communal swimming pool, fitness center, reception, parking, 24-hour security. In the apartments: modern, comfortable apartments, equipped kitchen, terrace with views of the surroundings and the sea, comfortable bathroom with shower or Jacuzzi to choose from, the complex is surrounded by tropical...
Exotic Property
Villa for 2 236 423 euro on Phuket Island, Thailand
2 236 423 €
Villa on Phuket Island, Thailand
352 sq.m 5 6
In the complex: a private luxury villa with 5 bedrooms on the beach with direct access to Natai beach in Phang Nga province. In the villa:one-storey villa with a large terrace, a spacious living room combined with a kitchen and dining area, a fully equipped home office, 5 bedrooms. Private swimming pool with Jacuzzi, private gazebo on the...
Exotic Property
Apartment for 120 364 euro on Phuket Island, Thailand
120 364 €
Apartment on Phuket Island, Thailand
36 sq.m 1 1
In the complex: a new project of 5 floors, a total of 124 apartments with 1 bedroom. The complex provides all the necessary infrastructure for the full operation of a hotel - reception, lobby, restaurant and bar, fitness center, meditation and yoga area, Parking. The special feature of the complex is a swimming pool, restaurant, bar located on...
Exotic Property
Villa for 201 026 euro on Phuket Island, Thailand
201 026 €
Villa on Phuket Island, Thailand
85 sq.m 1 2
In the complex: a tropical complex of 28 villas with hotel infrastructure. The complex has a restaurant, a children's room, a gym, a reception, an office of the management company, parking, 24-hour security. In the villa: 2-storey villas with a private pool and sea views. Natural materials are used in the decoration, which creates a feeling of...
Exotic Property
Villa for 411 713 euro on Phuket Island, Thailand
411 713 €
Villa on Phuket Island, Thailand
272 sq.m 3 4
In the complex: a large complex of Luxury villas in the south of Phuket, consists of 92 villas of 3 types ranging from 113 to 333 sq.m. The complex is adjacent to the territory of a 5* hotel and is connected with it by a common infrastructure. A separate building is dedicated to the infrastructure of the complex, which includes: lobby,...
Exotic Property
Villa for 764 957 euro on Phuket Island, Thailand
764 957 €
Villa on Phuket Island, Thailand
370 sq.m 3 3
Description:Unsurpassed comfort and privacy in a carefully designed cozy and atmospheric environment. The exclusive luxury project is located in the bosom of beautiful and serene nature: there are lakes and trees, an atmosphere of luxury and tranquility, an indoor shopping mall, restaurants and entertainment, exquisite spas and treatments, the...
Exotic Property
Villa for 349 284 euro on Phuket Island, Thailand
349 284 €
Villa on Phuket Island, Thailand
237 sq.m 2 2
The complex has 31 private villas with modern design. A multifunctional club house with impressive indoor and outdoor facilities, including a reception desk, restaurant, bar, sauna and yoga room. A creatively designed space to enhance your exceptional lifestyle. Description of the property: A complex of villas in a modern style. Each villa has...
Exotic Property
Apartment for 152 152 euro on Phuket Island, Thailand
152 152 €
Apartment on Phuket Island, Thailand
26 sq.m 1 1
In the complex: a large complex with apartments surrounded by a park area, outdoor pools in the center, which stretch from building to building, resembling a water park, gym with modern equipment, restaurant, bar, parking, 24-hour security. The apartments have eco-friendly materials, a good layout and a bright interior reminiscent of the beach...
Exotic Property
Villa for 511 215 euro on Phuket Island, Thailand
511 215 €
Villa on Phuket Island, Thailand
271 sq.m 3 3
In the complex: A complex of 6 villas from a large developer who has been specializing in the construction of villas for more than 15 years. In the villa: Two-storey villas with three bedrooms, a swimming pool and a garden are made in a modern Japanese style. Many natural materials are used in the decoration and decoration: wood, marble. Every...
Villa for 492 515 euro on Phuket Island, Thailand
492 515 €
Villa on Phuket Island, Thailand
362 sq.m 4 4
In the villa: two-storey villas with four bedrooms, a swimming pool, a garden and a spacious terrace, built in a modern style. Feature: the complex is located on the southeastern beach of Phuket. There is all the necessary infrastructure for a comfortable stay around - restaurants, shops, schools, kindergartens and the largest seafood market...
Exotic Property
Villa for 691 029 euro on Phuket Island, Thailand
691 029 €
Villa on Phuket Island, Thailand
351 sq.m 3 4
In the complex: a new complex of 33 villas, located next to one of the most popular international schools in Phuket. In the villa: the whole complex is built in such a way that the panoramic windows of each villa offer a beautiful view of the city and the hills. Feature: Since the developer is also the owner of the international school, all...
Exotic Property
Villa for 678 465 euro on Phuket Island, Thailand
678 465 €
Villa on Phuket Island, Thailand
360 sq.m 2 3
The complex has 18 villas of five different types, with an area of 300-700 sq.m., arranged in terraces at different heights to provide panoramic sea views of all villas. Round-the-clock security and video surveillance. In the villa: the entrance to the villa is decorated with a water composition with waterfalls. The main floor is the upper...
Exotic Property
Villa for 321 642 euro on Phuket Island, Thailand
321 642 €
Villa on Phuket Island, Thailand
190 sq.m 2 2
In the complex: car parking, video surveillance, restaurant, management company and villa maintenance service. The villa has 2 bedrooms and a private pool, bathrooms in each bedroom, built-in wardrobes and furniture, modern open-plan Western-style kitchen, panoramic windows, pool terrace for outdoor entertainment, tropical landscape....
Exotic Property
Villa for 988 046 euro on Phuket Island, Thailand
988 046 €
Villa on Phuket Island, Thailand
420 sq.m 4 5
In the complex: 7 villas in a gated complex. In the villa: the interior of the houses is made in Indonesian style - a beautiful combination of wooden furniture with light walls. Spacious rooms and high ceilings, combined living room with kitchen area and access to the pool. Garden, private parking for 2 cars. Feature: proximity to Laguna...
Exotic Property
Apartment for 263 847 euro on Phuket Island, Thailand
263 847 €
Apartment on Phuket Island, Thailand
60 sq.m 1 1
In the complex: a new residential complex, ideally located in the Lagoon area of Bang Tao Beach, provides access to Layan and Bang Tao beaches just a few kilometers away. All necessary infrastructure - cafes, restaurants, shops, spas, etc. are within 5 minutes by car. In the apartments: the interiors of the apartments are designed in a modern...
Exotic Property
Apartment for 95 965 euro on Phuket Island, Thailand
95 965 €
Apartment on Phuket Island, Thailand
37 sq.m 1 1
In the complex: the landscape of the central area literally revolves around the pool, designed for your full rest. He creates unique art spaces with green islands throughout, recreation pavilions and places with a unique atmosphere and design that manifests itself in the details of the exterior. This complex is imbued with the passion of...
Exotic Property
Apartment for 113 982 euro on Phuket Island, Thailand
113 982 €
Apartment on Phuket Island, Thailand
36 sq.m 1 1
The complex has 2 seven-storey buildings, a total of 393 apartments with different layouts - studios, with 1,2 or 3 bedrooms to choose from. There are 4 separate zones on the territory of the project - entertainment, gastronomic, sports and business hubs. In the business hub, it is easy to organize a business meeting, make a bank transfer or...
Exotic Property
Apartment for 108 554 euro on Phuket Island, Thailand
108 554 €
Apartment on Phuket Island, Thailand
25 sq.m 1 1
The complex has 3 eight-storey buildings, a total of 545 apartments. A lobby, a swimming pool, a rooftop recreation area, a gym and a multifunctional space for work and leisure. In the apartments: stylish design, well-thought-out apartment layouts with spacious terraces. [property_types] The price includes: finishing, plumbing, built-in...
Exotic Property

Favorable Price-Quality Ratio

Over the past 15 years, residential real estate in Phuket has appreciated by 150%, averaging a 10% annual increase. Despite this significant growth, prices remain accessible compared to other popular resort destinations. According to a recent study by Knight Frank in "The Wealth Report 2024," Phuket offers the best price-quality ratio among the world's most sought-after resort regions. Here, for $1 million you can purchase an average of 213 sq. meters of luxury real estate.

For perspective, $1 million buys only 30 square meters in Saint-Tropez, France, 50 square meters in Ibiza, Spain, and 91 square meters on Italy's Lake Como.

Svetlana Kasatkina
Svetlana Kasatkina
Managing Partner

The entry threshold for investment real estate in Phuket starts at $100,000, specifically for seaside resort complexes from reliable developers with licenses for daily rentals. One exceptional project at Nai Yang Beach offers 30-square-meter studio apartments, fully furnished and finished, for $85,000. However, this price is available only during initial sales and won’t last long. If you’re considering five-star apart-hotels under global brand names, prices start at $150,000.  There are no tiny studios in such projects, for this money you will get 45-meter apartments.

Low Additional Costs

In Thailand, the additional expenses involved in property transactions are relatively low, ranging from 3% to 5% of the property's price. This includes all potential buyer costs such as taxes, duties, and fees for connecting utility meters.

One significant financial benefit in Thailand is that new constructions are exempt from VAT. While many countries impose VAT on primary market transactions, increasing the financial burden on investors—like a 19% VAT in Cyprus and 11% in Bali—in Thailand, there is no VAT on such properties. Instead, developers pay a special business tax of about 3%, which they remit directly to the government, not passing these costs onto buyers.

Even in Dubai, known for its low-tax benefits, the overall costs are higher, as the registration tax alone amounts to 4%. Comparing these figures to European costs, where additional expenses can exceed 20%, highlights Thailand's attractiveness.

Svetlana Kasatkina
Svetlana Kasatkina
Managing Partner

Many investors reduce additional costs by conducting transactions remotely, which is a common practice with us. Every stage of the transaction can be managed from afar, which saves both money and time that would otherwise be spent traveling to Thailand. Our developers are equipped to accept various forms of payment including dollars, baht, yuan, and even cryptocurrencies, offering further flexibility and convenience for international buyers.

High Returns

Phuket real estate stands out globally for its high returns, driven by two key factors.

Firstly, properties typically experience an average increase in value of around 30% from the beginning of sales to completion—a level of growth not commonly observed in European markets. Even after completion, finished apartments continue to appreciate, albeit at a slower pace.

Secondly, apartments in Phuket are in high demand for rental purposes, thanks to the continuous influx of tourists throughout the year.

Svetlana Kasatkina
Svetlana Kasatkina
Managing Partner

Guaranteed income programs are common in Phuket, providing investors with a fixed sum regardless of how their apartment is rented out. Currently, average yield rates range from 5% to 8% per annum. For those willing to take on some risk, there's potential to earn even higher returns.

Rental programs without guarantees, known here as Rental Pool, can yield up to 20% in a good year. However, during challenging periods like the height of the pandemic, these programs typically cover only maintenance costs.   

For expert consultations, reach out to Exotic Property, a leading real estate agency operating in the Phuket market for over 15 years. As part of the esteemed Thai holding Exotic Group, Exotic Property offers a comprehensive suite of services, including consulting, transaction support, and post-sale assistance for investors and buyers of resort properties. 

Quoting conditions of Prian.info materials

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Phuket: The top region for real estate investment — Seven proofs

Phuket offers everything real estate investors are looking for

  • 30.05.2024
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