Phuket Property: A Remarkable Journey of Growth and Stability
Over the past two decades, Phuket's property market has demonstrated unique resilience and growth, distinguishing itself from other major vacation destinations. This uniqueness is attributed to two primary factors: the market's reliance on cash transactions due to the unavailability of financing options for foreign buyers, and its focus on condominium and villa sales to international clients.
The absence of mortgage lending to foreigners means that fluctuations in interest rates and typical demand-supply dynamics have had minimal impact on Phuket's real estate sector. Despite facing challenges such as the 2004 Boxing Day Tsunami, financial crises in 1997, 2001, and 2008, and public health emergencies like SARS, Bird Flu, and the COVID-19 pandemic, the market has consistently rebounded swiftly, maintaining its long-term buoyancy.
Many foreign investors first experience Phuket as tourists, drawn to its natural beauty, culture, and lifestyle. This attraction has led to a growing expatriate community, evidenced by the increase in international schools on the island—from 11 in 2019 to 16 by 2024, with a 17% year-on-year rise in student enrollment. Additionally, the local Thai population in Phuket has been steadily increasing, with projections estimating a rise from 455,102 in 2024 to 512,000 by 2035, indicating a sustained demand for property from Thai nationals.
Phuket's accessibility has further enhanced its appeal. The island is well-connected with direct flights from various regions, including Southeast Asia, China, Korea, India, Australia, the Middle East, Turkey, Russia, and Western Europe. By December 2024, Phuket International Airport was on track to welcome over 10 million foreign visitors, approaching the record 18 million passengers of 2019. This surge has been supported by expanded visa exemption rules and extended stay durations, making Thailand an even more attractive destination.
The condominium market has seen significant activity, with sales more than doubling from an average of 1,148 units per year between 2014 and 2019 to 3,300 units sold in 2023. The first half of 2024 alone recorded 3,000 condo sales, marking a 142% year-on-year increase. Notably, there has been a shift towards more affordable units, with 63% of recent sales priced at or below THB 8 million, compared to 45% in the 2014-2022 period.
The villa market has also experienced remarkable growth. In the first half of 2024, 65 new villa projects were launched, totaling nearly 1,300 units with a cumulative value of THB 36 billion. The total market for villas on the island has reportedly exceeded THB 160 billion, with top-end luxury villas now reaching prices in the US$10 million range. Established developers are expanding their portfolios, and new entrants from both overseas and Bangkok are recognizing the potential for future growth in Phuket's real estate market.
In summary, Phuket's property market has showcased a remarkable journey of growth and stability, underpinned by its unique market dynamics, resilience to external shocks, increasing international appeal, and strategic infrastructure developments.
Source: The Phuket News
