Thailand Property Market

Resort Destinations versus Domestic Property Market

To effectively analyse the property markets within Thailand’s resort destinations, it’s crucial to acknowledge their unique characteristics compared to the broader Thai real estate market. The market dynamics in resort areas like Phuket, Koh Samui, and Pattaya are primarily driven by international demand, which closely correlates with the tourism sector. Factors such as the domestic economy, mortgage rates, and the overall Thai real estate market have a minimal influence on these areas.

In contrast, Bangkok operates as a city destination with a real estate market primarily fuelled by domestic demand. However, in the luxury condominium sector, international demand still plays a pivotal role. At Charlesdel, we specialise in marketing properties from Thailand’s resort destinations to international buyers, and we also cover properties in Bangkok. This analysis will therefore primarily focus on the property market trends within these resort areas, with a special emphasis on Bangkok as an exception.

Market Outlook

A very significant proportion of Thailand’s GDP is accounted for by tourism (12% pre-pandemic) which is also a key driver of the country’s property market in its resort destinations. On the back of the reopening of Chinese borders in March this 2023, following the pandemic lockdown, tourist numbers for 2023 reached 28M, (source The Ministry of Tourism and Sports) approximately 70% of pre-pandemic numbers. According to forecasts by the Finance Ministry, source Reuters, tourist numbers for 2024 are expected to reach well over 30M. The principal factor being foreign investors enabled by tourism, the Thai property markets’ recovery since COVID, for both property sales and rental, has been very strong in resort destinations such as Phuket and Koh Samui.

According to CBRE Thailand, the residential property market in Phuket is projected to remain robust throughout 2024, source Bangkok Post, with an expected price increase of 10-15%. This surge is mainly driven by demand from Russian buyers followed by Chinese. Meanwhile, global search volume on Google for “Koh Samui property for sale” increased by 23% in March 2024 compared to the same month in 2023, according to data from the Google Ads API as of April 2024. Additionally, Real Samui Properties, a local real estate agency, reported that many mid-range to luxury holiday villas in Koh Samui experienced continuous bookings throughout the last high season from December 2023 to January 2024.

Along with Russian demand, notably an increase in Russian investors looking to move their money into safe havens due to the nervousness about their economy fuelled by war anxiety, another key influence assisting the continued recovery of the real estate sector, particularly in resort destinations, is the Thai governments’ luring of foreign investors via new longer-term visa programmes (see for high net worth visitors and professionals deemed to be able add value to Thailand.

Segmentation by Area

The market for residential property at Thai at holiday destinations is segmented by location and characterised by different types of property and different price levels for areas such as Phuket, Koh Samui and Bangkok.

Phuket Island has transformed significantly over the past few decades, growing from a lesser-known location to one of the world’s top vacation spots, known as the Jewel of the Andaman Sea. This popularity boost has led to continuous improvements in infrastructure and road networks, as well as an increase in new attractions, drawing more tourists and real estate buyers, many of whom now consider making Phuket their permanent home. The villa market has been particularly targeted by developers to meet the demands of the increasing number of foreign nationals moving there.

The property market in Phuket is currently experiencing unprecedented growth, with new developments emerging rapidly, particularly inland where land is cheaper. This shift allows more people to afford modern luxury villas with private pools, appealing to those with smaller budgets. The trend towards buying homes rather than just vacation or investment properties has been notable, especially since the onset of Covid in 2020.

Where you will find the most expensive of Thailand’s resort properties, Phuket Island has the largest selection of exclusive high-end villas and condominiums and is particularly sought after by wealthy foreign investors. There is however a broad range of property types available, such as affordable apartments, townhouses and garden view estate villas, appealing to both international and Thai investors. According to Thailand Property, as of 1st March 2023, their mean condominium and villa listing prices were approx. 14M THB (avg price per sqm of 85K) and 18M THB respectively. Though entry level 2-bed villas in Phuket can be acquired for as little as 4M THB, at the super luxury end of the market, often priced in American dollars for the international market, villas can fetch up to 20M USD and beyond…

Koh Samui: Not so long ago favourite haven for backpackers and budget travellers, Koh Samui has developed over recent years into a full-blown resort destination with branded 5-start hotels and international schools to rival Phuket. There is a limited supply condominiums on the island, partly due to local zoning restrictions governing where condominiums and apartments can be constructed. The demand for villas on Koh Samui is lot higher, investors seeking to take advantage of the tropical island lifestyle via outdoor living space, and a majority of the listings are low to medium price pool villas. Following the gentrification of the island, Samui property prices have of course increased accordingly with average villa prices, excluding the super luxury segment, now similar to Phuket and properties at the top end of the market listed for as much as 8M USD…

Bangkok: In terms of overseas buyers, the focus on Bangkok is very much on the condominium market, with only a relatively small number of villa acquisitions by foreigners. Condominium prices in Bangkok vary greatly by area and amenities. According to real estate portal Thailand Property, their average list price per sqm for condos in Bangkok as of 1st March 2023 was approx. 60k THB. However, premium locations such as Sukhumvit can command in excess of 170k THB per sqm.