Summary of Key Driver’s Affecting Phuket’s Real Estate Market

In One Final Nutshell

It should come as no surprise that there is a strong correlation between the number of tourists a country embraces each year, and the volume of investment properties sold to those foreign visitors.

The numbers do not lie. Tourism is the key driver of the property sector in Phuket. Infrastructure improvements have kept pace with increased numbers of foreign arrivals, and that investment made in infrastructure (e.g. airport, roads, public transportation) over the last decade will comfortably accommodate yet further growth in tourism.

The motivation for most investors is either capital appreciation or income generation exceeding what they can receive from a bank. But investors and home owners alike should be aware that the road to profit and income can occasionally be choppy.

At the moment, the top buyers of property in Phuket are the Chinese and Russians; not coincidentally they are among the largest groups of foreign tourists to the island each year. But they are not only purchasing holiday homes or rental properties. More and more people are moving to Phuket for the lifestyle – either to work, retire or even to educate their children.

Future growth in the hospitality industry will certainly form the foundation of an expansion in the real estate market. If the tourist sector takes a downturn, however, the property sector will be impacted. There is no way to sugar coat this fact.

But we have seen multiple assaults on tourism in the last two decades, and Thailand has always bounced back. In the face of natural disasters, financial catastrophes, and global health scares the Phuket tourist industry may have blinked, but it has recovered each time, and continued to go from strength to strength.

Just as the tourist economy has proven to be remarkably resilient, the Phuket Property Market has likewise demonstrated a buoyancy that keeps investors coming back to Phuket year after year.

Even though the longer-term guarantees are more vulnerable to such events than short-term ones, it would require some seriously bad luck, and some seriously cataclysmic Black Swans, for these properties to be anything other than very lucrative investments over the next 20 years.