Phuket’s Shifting Demographics
Even without the foreigners who have decided to make Phuket their home, Phuket is experiencing strong population growth (7.4% annually). This is much higher than most other regions of Thailand, and is mainly down to the relocation of Thai nationals. For the broad property sector in Phuket, this is undoubtedly a key driver.
It is a global trend, dating back centuries, which has seen people (especially the younger generation) move from rural towns and villages to cities or wealthier provinces. This demographic shift inevitably buoys the local economy, including the property sector. While the primary impact of this population growth is on the local Thai property market, older affluent Thais are also buying luxury homes or condos in western-style developments.
This influx of new residents will buoy both foreign and local developments, the latter being extremely popular among middle class Thais and foreigners married to Thais (who don’t necessarily want to live near the centres of tourism). Demographic shifts related to the tourist market (i.e. the changing nationalities of both holiday-makers and foreign residents) are discussed in later sections.
Thais Marrying Foreign Nationals
It is no secret that there are foreigners who come to Thailand to find a Thai wife. This trend is not slowing, and obviously creates another dynamic within the Thailand property market.
Should the couple decide to live in Thailand, and purchase a home, this would be a boon to the real estate sector (and to the economy as a whole) because the capital would typically be transferred into Thailand from overseas.
An Ageing Thai Population
Thailand, like many countries, has an ageing population. According to the latest United Nations figures, Thailand has the 3rd most centenarians (those who live to 100 years of age or older) as a percentage of the population in the world, trailing only Portugal and Japan. This is a factor of diet and lifestyle, and it points to Thailand as a good country in which to grow older and remain healthy.
But as in Japan, where people are living longer and having fewer children, it raises the question of how the future generations will care for their ageing citizens. In Phuket, for example, nearly 10% of all Thai nationals are over the age of 60. If this trend continues, it could have a significant impact on property dynamics.
Historically, the elderly in Thailand live with their children. If fewer children are being born, the new challenge will be how Thailand (including Phuket) will provide housing for the growing elderly population.
One developer in Phuket is tapping into this market by planning the first modern retirement village, which will offer services equivalent to a western care home. Managed by a British company, it is certain to be popular with individuals who require some level of care, but prefer tropical weather to their own cold and rainy country. Could this be the first of many?
People’s tastes and desires shift over time, often influenced by outside factors such as television or social media. Social trends are sometimes short-lived, disappearing as quickly as they emerged, but in the context of property we are talking about major societal changes which occur over time.
Looking back over the last 40 years, Thais no longer live predominantly in typical Thai style houses. Many Thais are now living in larger structures, more western in appearance and design, or even in luxury villas. Many younger Thais are living in condominiums, townhouses, or in gated housing estates. In other words, the demand for new modern houses was not driven by foreign buyers, but it obviously contributes to the number of developments which target a mix of foreigners and Thais.
These changing tastes have been a direct result of greater contact with and influence from other countries, and the increased prosperity that globalisation has brought to Thailand. It did not happen overnight, but certainly in Phuket the stark contrast in architectural styles between the townhouses of Phuket Town and the condos and villas of Rawai bear witness to the changing trend.