Trends in the real estate market in Phuket and Thailand generally in 2023-2024
In 2023, the Thai real estate market in Phuket and Thailand experienced a significant shift towards luxury and premium apartments, with large areas allowing these projects to outpace registrations of high-rise apartments in the first half of the year. The number of expats moving to Thailand to live and work has increased. The turnaround highlights a new trend in Thailand’s property market, reflecting the changing preferences of homeowners and investors.
The Bangkok property market has adapted to these new demands, placing greater emphasis on community-oriented living spaces that meet the desire for privacy and comfort. The Phuket property market has in turn benefited from its appeal to both domestic and foreign buyers, offering a combination of luxury and tranquility away from the bustle of the city.
The Thai property market has demonstrated resilience and the ability to evolve, suggesting a strong future. Despite the traditional dominance of high-rise developments, the shift towards low-rise housing indicates a market response to changing lifestyles and investment patterns.
Forecasts for the Phuket housing market
The Phuket housing market is expected to remain strong in 2024. Prices are forecast to rise by 10-15%, driven by demand from Russia and the expected return of Chinese buyers in the second half of the year. In 2023, house prices in Phuket increased by 10-15%, exceeding the typical increase of 5%, and reached their highest growth ever. Some projects have grown by 30% due to their unique concept, favorable location and high demand.
2023 was a peak year for the Phuket housing market, with total sales increasing four times the average. Sales of resort villas reached 400 units, well above the typical 100 units per year. Sales of apartments in multi-apartment buildings increased from 500-600 per year to 2000.
The housing market boomed during Phuket’s first post-pandemic tourism boom of 2021, which attracted foreign travelers with high purchasing power, many of whom bought luxury villas and apartments in droves. The shortage of affordable housing units has prompted developers to launch new projects in 2022, leading to the market peaking in 2023.
Investment Trends and Opportunities
The majority of home buyers in Phuket were Russians, who bought large apartments and villas, often in family groups. The second largest nationality of buyers was Chinese requiring short-term or temporary stays. The third group consisted of Europeans who were looking for large apartments in small projects and holiday homes that could be rented out.
House price growth in Phuket is expected to continue into 2024, despite an increase in new supply, making it difficult for prices to rise further. Listed and Bangkok-based property developers have also entered the Phuket market, attracted by its potential.
Economic review
Thailand’s economy has been steadily improving and the outlook for 2024 is encouraging. The World Bank forecasts GDP growth of up to 3.2%, which could lead to increased demand for real estate. The inflation rate is projected to remain within the target range of 1% to 3%.
Government measures, low interest rates and developer flexibility have contributed to the resilience of the real estate market during the pandemic. Domestic demand and changing preferences also played a key role.
Foreign investments and strategic opportunities
Thailand continues to attract foreign investors, with more diverse international players entering the scene. Successful investors are looking to hotspots such as Bangkok and Phuket, where infrastructure development increases potential returns. They are also looking at opportunities in the commercial and hospitality sectors.
Conclusion
Given the current economic stability and growth prospects, now is an opportune time to invest in Thai property. Increasing property values and a robust market offer investors reliable opportunities. Conducting thorough research and consulting with local experts will help you make the most of these opportunities and protect your investment from risk.
