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Key Insights for Buying Luxury Property in Phuket

Phuket’s remarkable transformation from a relatively unknown beach destination to Thailand’s leading centre for luxury real estate investment has been enabled by consistent improvements in the island’s infrastructure. This evolution began with the completion of the Sarasin Bridge in 1967, connecting the island to the mainland and paving the way for easier access. In 1984, the Thai government’s investment in Phuket’s international airport enabled the commencement of direct international flights, boosting tourism and accelerating development. Over the decades, sustained infrastructure upgrades have been critical in supporting Phuket’s increasingly vibrant property market that attracts discerning investors worldwide. Beyond being an appealing choice for a tropical holiday home, the island is also a highly desirable place to live, offering extensive amenities, international schools, excellent healthcare, shopping centres, and a stunning natural setting with varied breathtaking landscapes.

This guide provides key insights for luxury property for sale in Phuket, including comparisons with Koh Samui, to help investors make informed decisions.

The Resilient Phuket Property Market

Phuket’s real estate market is strongly correlated with its continued success as a premier tourist destination. Like Thailand’s other resort locations, notably Koh Samui and Pattaya, the property market is cash-based and largely insulated from global economic downturns. The consistently strong tourism sector has provided stability and growth for the real estate market over the years, making it a reliable choice for investors. This resilience is especially evident in the luxury segment, which has thrived due to demand from high-net-worth individuals seeking exclusive investments.

Market Performance and Recovery

Phuket’s property market has demonstrated remarkable resilience and recovery following the global Covid pandemic, driven by the resurgence of tourism, which has led to record-breaking years in 2023. According to CBRE, condominium sales reached new heights, with over 3,300 units sold in 2023, more than doubling the average annual sales figures between 2014 and 2019.

With final 2024 figures still being compiled; half-yearly performance figures indicate it will also be another exceptional year for Phuket real estate. The villa market has surged, boosted by increased demand for branded properties and growing interest from wealthy Thai investors, digital nomads, and families relocating to Phuket. Thailand welcomed over 35 million international tourists in 2024 (source: The Nation), a 25% increase compared to 2023. This strong market performance highlights Phuket’s ability to adapt and thrive in challenging global conditions, making it a compelling choice for property investment.

Phuket vs. Koh Samui: Which is the Better Investment?

When comparing Phuket and Koh Samui, value for money is a key consideration. At the entry level, property prices are relatively similar, with studio condos starting at around 2 million THB and villas from 4 million THB. However, in the luxury segment, Phuket properties generally command higher prices. Market-leading estates in Phuket can be priced at over 20 million USD, while Koh Samui’s most exclusive villas typically top-out at around 7-8 million USD. On a price-per-square-metre basis, Phuket is more expensive, reflecting its superior infrastructure, market maturity and higher land prices.

Predominantly a market for villas, houses, and leasehold apartments, Koh Samui offers limited options for freehold condominiums, with no truly luxury stock of this type to rival Phuket. In contrast, Phuket provides an extensive range of freehold condominiums, including high-end branded residences affiliated with international hotel brands. These properties offer integrated resort services and appeal to buyers seeking a seamless mix of luxury and convenience. Phuket features a wide range of luxury condos for sale, with prices ranging from half a million USD to several million USD for premium West Coast oceanfront penthouses.

Ownership Structures for Luxury Villas in Phuket

In Thailand, direct foreign ownership of land is restricted, so luxury villas in Phuket are typically purchased through one of two methods: freehold ownership via a corporate holding structure or renewable lease agreements. For the luxury market, villas priced at 30 million THB or higher represent the lower end of the sector. Here’s a closer look at the ownership options:

Freehold Ownership via Corporate Structures

To acquire freehold land, foreign buyers generally establish a Thai limited company which they control as a director. This method can comply with Thai law but comes with strict requirements:

  • Thai Shareholding: Thai nationals must hold at least 51% of the shares in the company.
  • Legitimate Business Operation: The company must function as a real business, generating revenue and paying dividends to its shareholders and not purely a holding mechanism for the land.
  • Compliance and Reporting: Annual financial statements must be filed to maintain compliance with Thai regulations.

While the costs of setting up and maintaining a compliant corporate structure are significant, they are financially feasible for luxury villas. These properties are often operated as rental businesses, with income distributed as dividends to Thai shareholders, aligning with Thai law. Careful structuring, and full legal compliance, has become even more critical following the 2024 crackdown on illegal nominee structures, which targeted improper use of corporate entities by overseas investors for villa ownership.

Renewable Lease Agreements

Some luxury villas in Phuket are sold on renewable lease agreements. Under this arrangement, the initial lease term is 30 years – the maximum allowed under Thai law – with contractual agreements to renew for additional 30-year terms upon expiry. While this option provides an alternative to freehold ownership, investors should be cautious, as lease renewals are a grey area under Thai law with little legal precedent. Buyers need to ensure that the lease renewal is secure, especially when dealing with smaller, less established developers.

For developments associated with global brands, lease renewals are generally more secure, as these brands have long-term reputations to uphold.

Branded Residences and Luxury Trends

Phuket has established itself as a leader in branded residential real estate in Asia. Recent developments like The Standard Residences and Tri Vananda or just a few examples of branded real estate marketing to high-net-worth investors. These properties combine luxury living with premium amenities and high-quality management, often in collaboration with international hospitality, wellness, or fashion brands.

The post-pandemic demand for resort-style living and sustainable properties has further boosted Phuket’s luxury market. Inland developments, such as Tri Vananda’s wellness-focused community, reflect this trend, offering eco-friendly features and expansive green spaces. This shift highlights Phuket’s ability to adapt to evolving market demands, ensuring it remains competitive and attractive to discerning investors.

Infrastructure and Amenities

Phuket’s infrastructure and amenities are first class and undoubtably better than those of Koh Samui. Decades of growth have resulted in well-maintained road networks, reliable utilities, and modern conveniences. The island is home to 16 international schools, numerous hospitals of international standard, and a variety of shopping centres offering everything from luxury brands to daily essentials. Phuket also has seven 18-hole golf courses, compared to just one on Koh Samui.

Infrastructure and amenities on Koh Samui, while continually making notable improvements, are still playing catch up to those on Phuket. Its appeal lies in its more relaxed atmosphere and less-developed setting, which may suit buyers seeking a quieter lifestyle.

Looking Forward

Critical to supporting tourism and driving forward the real estate market is the continued investment in Phuket’s infrastructure. The future beyond 2025 looks bright for Phuket. “Phase 2” of Phuket International Airport’s expansion is currently in the design phase, with the Airports of Thailand (AoT) planning to expand the capacity at HKT from the current 12.5 million passengers to 18 million. In addition to a new terminal building, the 3-year, THB 6 billion project will also involve expanding the runways and the taxiways and adding a bespoke terminal for seaplanes.

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