Tourism boom boosts Phuket's luxury home market

Located just a short walk from luxury hotels in western Phuket, a construction site bears a banner declaring, "The place to be is now the place to live," promoting a soon-to-be luxury condominiums project that is part of The Standard, a boutique hotel brand, reported Nikkei.

The development, the inaugural luxury residential project by Thai conglomerate Central Group, will feature approximately 190 units at a cost of 5 billion baht (US$139 million), with completion slated for the end of 2026. The starting price for the condos is set at around 12 million baht ($334,300).

Asia commands more than 20% of the global market for branded residences, with Phuket leading the way, boasting 22 projects, according to U.K. real estate consultancy Savills.

According to Canadian real estate consultancy Colliers, Phuket's condo supply reached a record 8,700 units in 2023, double the 2019 level.

Major developers, including Origin, Sansiri, Siamese Asset, and Raimond Land, are expanding their investments in Phuket, with new projects planned in popular areas such as Cherng Talay and Patong, reported Thai newspaper The Nation.

The thriving high-end real estate market in Phuket is attributed to a robust tourism recovery and Thailand's visa policies, which are attracting wealthy individuals for investment and settlement. In 2023, nearly 8.4 million foreigners visited Phuket, marking a 152% increase from 2022, according to the Thai Ministry of Tourism and Sports.

However, Phuket's real estate market faces challenges. The current trend has led to a 15-20% increase in property prices since the end of the Covid-19 pandemic, and in some instances, house prices have doubled, reports Nikkei.

Maetapong Upatising, president of the Phuket Real Estate Association, stated that land prices in prime locations have risen from an average of 3 million baht to as much as 8-9 million baht per rai (4,000 square meters), with certain plots fetching up to 120 million baht per rai, reports The Nation.

Real estate consultant Nattha Kahapana, the managing director at Knight Frank Thailand, anticipates an annual increase of 8-10% in land prices in Phuket, subsequently driving up the prices of villas, especially those situated on the beach.