Phuket emerges as year-round draw

Phuket's property market continues to expand despite a slowdown in Thailand's housing sector, supported by infrastructure investment, new commercial developments and a growing population relocating to the island.

The market is now driven more by residents who live and work in Phuket year-round than by holidaymakers and second-home buyers alone, said Poomchai Mattayompoppinyo, managing director of SET-listed developer Sansiri's southern region project development.

"The island's property market has changed significantly since we entered Phuket in 2011," he said. "Phuket has evolved from a tourist destination into a self-sustaining international destination."

Investment in transport, healthcare, education and retail facilities is creating employment opportunities and attracting both Thai nationals from other provinces and expats seeking longer-term homes, said Mr Poomchai.

BEYOND TOURISM

The expansion of infrastructure and commercial facilities is helping transform Phuket into a year-round residential destination, which supports demand for both homes to buy and properties to rent.

Major developments include the Kathu-Patong and Muang Mai-Koh Kaew-Kathu expressways, as well as road improvements intended to ease traffic congestion across the island.

Healthcare investment is also expanding, with new hospitals, medical facilities and wellness services catering to international residents and visitors.

Phuket has 19 international schools, with more than 5,000 students from over 50 nationalities, according to Sansiri. The number of international schools rose 51% over three years, reflecting growing demand for education among families relocating to the island.

Retail development is another important driver, with Central Phuket planning a 7-billion-baht expansion and IconPhuket expected to add another major shopping and lifestyle destination.

RETAIL FACTOR

Tritecha Tangmatitham, managing director of SET-listed developer Supalai, said the arrival of large shopping venues could have a direct impact on residential demand in surrounding areas.

He cited the launch of IconPhuket, after which Supalai condos located about two kilometres away recorded a sharp increase in sales. The project sold 40 condo units within one month, compared with its usual sales rate of five units per month, he said.

The example highlights how major retail developments can stimulate demand for nearby residential properties, particularly when they create employment opportunities and improve the convenience of everyday living. Such developments can attract buyers seeking homes close to shopping, dining and lifestyle facilities, as well as investors anticipating stronger rental demand.

CHANGING POPULATION

More employment opportunities are nudging people to move to Phuket, creating demand beyond the holiday-home market.

Mr Poomchai said people moving to the island included Thai workers, expats and business operators who need permanent accommodation.

This trend supports demand for condos and low-rise houses, both for purchase and rental, particularly among employees in tourism and related industries.

Pool villas are also attracting buyers who intend to live in Phuket throughout the year, rather than use their properties only during holidays, he noted.

The profile of foreign buyers has broadened, with demand no longer concentrated solely among Chinese and Russian nationals. Other Russian-speaking nationalities and European buyers are becoming more prominent, alongside Thai investors purchasing villas for rental income.

LONG-STAY OPTION

The rental market is benefiting from foreigners who stay in Phuket for several months and prefer monthly accommodation to hotels.

Mr Tritecha said monthly rentals were generally more economical than daily hotel rates and allow tenants to experience local neighbourhoods and lifestyles.

For example, a townhouse with two or three bedrooms renting for 36,000 baht per month costs roughly 1,200 baht per day. This can be more affordable than staying in a hotel, particularly for families or groups planning extended stays.

The demand for longer-term accommodation also supports different residential formats, from condos and townhouses to detached houses and luxury villas, he said.

STRONG RENTAL RETURNS

Rental returns in some parts of Phuket are also attracting investors, particularly in areas where housing prices remain relatively accessible compared with potential monthly rental income.

Mr Tritecha said properties in Thep Krasattri could generate gross rental yields of more than 10%, based on prevailing selling prices and rental rates.

A townhouse priced at 3 million baht, for example, could command monthly rent of roughly 36,000 baht. A semi-detached house priced at 5-6 million baht could earn nearly 50,000 baht per month, while a detached house worth around 10 million baht could fetch 100,000 baht in monthly rent.

"These examples indicate the potential appeal of residential investment in areas where demand from workers and long-stay tenants supports regular rental income," said Mr Tritecha.

In the more established Bang Tao and Cherngtalay areas, Mr Poomchai said luxury villas could generate net rental yields of 6-8%.

A luxury villa worth around 40 million baht could earn 300,000-400,000 baht per month under a one-year rental contract.

For shorter stays, a three-month rental contract could command between 600,000 and 700,000 baht per month, reflecting the premium paid for flexibility and seasonal demand.

SUPPLY MEETS DEMAND

Despite the market's growth, developers still need to assess demand carefully because buyer profiles, price points and rental prospects vary significantly between locations.

Property consultancy Savills Thailand reported 763 new pool villas were introduced in Phuket during the first half of 2026 across 52 projects. Most new supply was concentrated in Bang Tao, Cherngtalay, Kamala and Rawai, with full-year launches forecast to reach roughly 1,200 units.

Sales totalled 389 units in the first half, indicating demand was more cautious amid economic uncertainty, noted Savills.

However, luxury projects in prime locations and those developed by reputable brands continued to attract interest, suggesting Phuket's villa market is expanding, but new supply is growing faster than buyers' willingness to commit across all segments.

Developers are also adjusting their sales strategies to address concerns among foreign buyers, particularly those relating to off-plan purchases and the quality of completed properties.

Sansiri is introducing completed-before-sale villas to give buyers greater confidence that the homes they purchase match the finished product. The approach is intended to reduce uncertainty over construction quality and delivery, as well as the risk of projects failing to meet buyers' expectations.

Mr Poomchai said he expects the completed-villa model to achieve sales of one unit per month, compared with an estimated market average of half a unit per month.

PREMIUM MARKET

According to property consultancy CBRE Thailand, sales in Phuket's luxury residential market rose 45% in the first half of 2026 compared with the second half of 2025, reflecting stronger investor confidence and demand for premium properties.

Bang Tao and Cherngtalay remained the most sought-after locations, highlighting the appeal of established residential areas with access to lifestyle facilities and international amenities.

Foreign buyers accounted for 67% of condo and villa purchasers, with Thais making up 33%, underscoring Phuket's position as an international residential market.

The largest foreign buying markets comprised the UK, Russia, Canada, the US, Europe and India.

However, the island's property market is not uniformly strong, as demand and investment returns depend heavily on location, product type and target customers, said Mr Poomchai.

"Developers entering the market must identify whether demand comes from permanent residents, tourism-related workers, expat families, holiday-home buyers or investors seeking rental income," he said.

Phuket's long-term property prospects depend on whether infrastructure, commercial investment and employment opportunities can sustain demand from people living on the island year-round, said Mr Poomchai.