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Return on Investment (ROI) in Phuket’s Real Estate Market – A 2024 Market Analysis
The real estate market in Phuket has increasingly attracted foreign and domestic investors due to its high ROI, driven by growing tourism, infrastructure developments, and rising property values. Phuket’s appeal as a tropical destination has positioned it as one of Thailand’s most attractive investment hubs, with substantial growth observed over the past five years. Additionally, the island is witnessing a growing expat community, as more foreigners choose Phuket as their Southeast Asia destination hub, further enhancing the demand for properties in the area. In this blog, we’ll summarize the Return Of Investment On Real Estate In Phuket, covering an overview of foreign investment in Phuket real estate, property value growth from 2019 to 2024, and key ROI drivers influencing the Phuket real estate market. So let’s get right to it.
An Overview Of Foreign Investment in Phuket Real Estate
The property market in Phuket has experienced a remarkable surge in foreign investment following the country’s reopening post-pandemic. By 2023, over 100 billion baht (approximately $3 billion or €2.7 billion) had been injected into the real estate sector, with a significant portion coming from international buyers. Investors from countries such as Russia, China, and Australia are particularly active, drawn by the island’s appealing lifestyle and lucrative financial prospects. Many are acquiring properties as vacation homes or investment assets in Phuket’s popular tourist areas.
In 2023, Russians emerged as a prominent force in foreign ownership, often purchasing entire floors or even whole buildings in prime locations, showcasing their confidence in Phuket’s real estate potential. This trend highlights the growing appeal of the island as a desirable destination for investment, blending both lifestyle and economic opportunitieshts into this topic, you can refer to sources discussing the recent trends and statistics surrounding foreign investment in Phuket’s real estate market.
Property Value Growth Over Five Years: 2019 to 2024
Real estate in Phuket has experienced steady appreciation in average prices. Condominium prices, for instance, have risen by approximately 10% annually since 2019. New projects in areas like Bang Tao beach have seen prices skyrocket due to increasing demand for luxury properties, with land prices exceeding 100 million baht per rai ($18.93 million per acre or €6.94 million per hectare) by 2023. The following highlights Phuket’s property value trajectory over the past five years:
- 2019 – 2020: Property values remained steady, supported by strong tourism and consistent foreign investments.
- 2021 – 2022: The pandemic temporarily slowed growth, but prices rebounded following Thailand’s reopening in late 2021.
- 2023: A significant surge in investment occurred, with prices in popular areas experiencing a considerable rise. Condominium prices averaged 120,000 baht per square meter.
- 2024: High demand and ongoing new projects, particularly in the luxury segments, continued to drive price increases.
Key ROI Drivers in Phuket Real Estate
Phuket’s tourism recovery has spurred demand for rental properties. The average rental yield on condominiums and villas remains strong at 5-7%, appealing to investors aiming for stable, short-term income. Some developers also offer rental guarantees of up to 15 years, adding assurance for long-term investors.
Ongoing infrastructure improvements, like the expansion of Phuket International Airport and planned expressway projects, are expected to enhance accessibility and tourist capacity. These projects are set to increase Phuket’s appeal and property value, with forecasts suggesting annual arrivals could reach 18 million by 2031. Source: Thaiger
The “liquid gold” reputation of regions like Bang Tao, where beachfront properties are highly valued, illustrates Phuket’s rising luxury property demand. As a result, developers are increasingly focusing on high-end condominium and villa projects, leading to significant price appreciation in these segments.
Investment Insights: Condos vs. Villas
Phuket’s property market offers investment opportunities in both condominiums and villas. While condos offer easier entry with lower upfront costs and high rental demand, villas in popular locations tend to attract buyers looking for high-end, long-term investments. For example:
- Condos: High rental demand, especially in popular areas, with yields averaging 5-7%.
- Villas: Larger properties often have higher appreciation potential and offer additional ROI through resale in the luxury market
For a more in-depth comparison of whether you should buy a house or an apartment in Phuket, visit our blog.
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Phuket’s real estate market is set for sustained growth, fueled by ongoing foreign interest, infrastructure improvements, and a flourishing tourism sector. However, potential investors should carefully evaluate key factors such as property location, rental demand, and trends in price appreciation. Between 2019 and 2024, the market has demonstrated resilience and growth, with prices steadily rising in high-demand areas. As the region’s infrastructure continues to develop and tourism rebounds, Phuket presents an attractive investment opportunity for those eager to tap into Thailand’s booming property market. If you are looking for a future-proof investment opportunity in the real estate sector, you may want to consider buying a solar-powered, smart grid pool villa in Phuket‘s most sought-after locations.
