The Risks of Buying Off-Plan Property in Phuket

Buying property in Phuket off-plan can offer great prices, modern layouts, and attractive rental returns. But in Phuket, as in other parts of Thailand, buying off-plan real estate also comes with its own set of risks.

Foreign buyers should be aware of potential pitfalls before making a decision. Although many projects are completed successfully and deliver strong returns, others fall short — or worse, never get completed at all.

1. Delays in Completion

One of the most common risks is that the developer fails to complete the project on time. Construction delays in Phuket are not unusual and can arise from various factors:

  • Weather disruptions (especially during monsoon season)

  • Regulatory or zoning issues

  • Shortage of labour or materials

  • Financial instability of the developer

Delays can significantly impact rental income projections and personal usage plans, especially if the unit was intended as a holiday home or retirement base.

2. Project Abandonment

In rare but serious cases, developers run out of funds or experience legal issues that prevent them from finishing the project. In these situations, buyers may have already paid a significant portion of the price but be left with nothing more than a concrete shell.

This is why due diligence is essential before committing to any off-plan purchase in Phuket. Always check the track record of the developer, and ensure that appropriate escrow mechanisms are in place.

3. Quality Discrepancies

Even if the project is completed, it may not be delivered to the promised standard. Buyers sometimes receive units that differ from the original show unit or marketing materials — in terms of layout, materials used, or even room size.

The Condominium Act now prohibits misleading advertising, but enforcement is not always perfect. A well-written sales agreement, with clearly defined specifications, is crucial.

4. Lack of Proper Licensing

Some developers begin selling units before they have fully secured all legal permits and approvals, including:

  • Land title ownership

  • Environmental impact assessments (if required)

  • Building permits

  • EIA approval (for larger developments)

If a development proceeds without these, there is a risk of government intervention, fines, or even demolition orders.

5. Foreign Ownership Quota Uncertainty

If you’re a foreign buyer seeking a Phuket foreign freehold condo unit, make sure your off-plan unit is legally eligible and within the 49% quota. Developers sometimes oversell units to foreigners, only for buyers to later discover their unit can only be registered as leasehold.

Clarify this before signing anything, and request confirmation in writing.

6. Hidden Fees and Future Costs

Off-plan buyers can be lured in with competitive base prices but later discover high common area fees, sinking funds, or furnishing packages. Understand the full cost of ownership — not just the advertised sale price.

It’s also important to understand if the project will have hotel licensing, especially if you’re buying for investment and planning to rent the unit short-term.

Frequently Asked Questions (FAQ)

Q: Is it safe to buy off-plan property in Phuket?
A: Yes, but only when proper due diligence is done on the developer, legal structure, and permits. Work with a reputable agency and independent lawyer.

Q: What happens if a developer goes bankrupt?
A: If proper escrow protections are not in place, your funds may be at risk. Always insist on a secure payment structure and legal safeguards.

Q: Can foreigners buy off-plan freehold condos?
A: Yes, but only up to the 49% foreign ownership quota in any condominium project.

Q: Should I use a lawyer when buying off-plan?
A: Absolutely. A lawyer can review contracts, verify licensing, and protect your investment.

Final Thoughts: Off-Plan in Phuket – High Reward, High Risk

Buying off-plan can be financially rewarding, but it’s not without risk. It is absolutely essential to:

  • Research the developer’s history

  • Consult a qualified lawyer

  • Understand the legal framework

  • Be cautious with payment schedules

At Thai Residential, we help clients evaluate off-plan opportunities and protect their interests every step of the way.

You can read our article on the benefits of buying off plan here:

The Benefits of Buying a Phuket Condominium Off Plan

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Whether you’re looking at off-plan investment or completed resale units, our experienced team will guide you with honesty and transparency.

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