Authored by the expert who managed and guided the team behind the Thailand Property Pack
Yes, the analysis of Phuket's property market is included in our pack
As the allure of Phuket continues to draw in investors and dreamers alike, many are left wondering about the future of its real estate market.
Will it thrive amidst global economic shifts? What trends should potential buyers and sellers be aware of? How might local developments impact property values?
In this article, we'll explore the factors that could shape Phuket's real estate landscape in 2025.
Actually, we know this market inside and out. We keep tabs on it regularly, and all our discoveries are reflected in the most recent version of the Thailand Property Pack
Will Phuket real estate market crash in 2025?
Contrary to what many might believe, the Phuket real estate market is expected to remain robust in 2025, with continued growth but at a more moderate pace compared to the surge seen in 2023-2024.
Residential prices are projected to increase by 10-15% in 2025, continuing the strong growth trend but at a slightly slower rate than the 15-20% increases seen in 2023-2024.
While the villa market has seen exceptional demand, particularly from Russian buyers, it does not appear to be in a bubble. The growth is supported by fundamentals:
- Limited supply of prime beachfront land
- Strong demand from affluent foreign buyers
- Cash purchases rather than leveraged buying
Russian buyers accounted for 70% of foreign purchases in 2023 and this trend is expected to continue in 2025.
The sustained interest is driven by:
- Geopolitical factors encouraging Russians to seek second homes abroad
- Phuket's appeal as a tropical destination with high-end amenities
- While there is significant new supply coming to market, demand remains strong.
In Q1 2024, there were approximately 500 real estate projects for sale in Phuket, comprising 72,000 units valued at 460 billion baht. Of these, 62,000 units have already been sold, leaving only 10,000 units available.
This indicates a healthy absorption rate and suggests the market is not oversupplied.
Moreover, Chinese buyers are expected to return in greater numbers into 2025 and European buyers continue to show interest in larger units for holiday homes.
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What You Need to Know Before Investing in Phuket Real Estate in 2025
What is the projected growth rate for Phuket's real estate market in 2025?
The Phuket real estate market is expected to grow at a rate of 5% to 7% annually in 2025.
This growth is driven by increased tourism and infrastructure development on the island.
Investors are optimistic about the market's potential, given the steady increase in demand for vacation properties.
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How will the new infrastructure projects impact property values in Phuket?
New infrastructure projects, such as the expansion of Phuket International Airport, are likely to increase property values by 10% to 15% over the next few years.
Improved transportation links will make the island more accessible, attracting more tourists and potential property buyers.
These developments are expected to enhance the overall appeal of Phuket as a real estate investment destination.
What are the expected rental yields for properties in Phuket in 2025?
Rental yields in Phuket are projected to range from 5% to 8% in 2025, depending on the property's location and type.
Properties in prime tourist areas tend to offer higher yields due to consistent demand from vacationers.
Investors should consider the property's proximity to beaches and amenities when evaluating potential rental income.
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How will the Thai government's policies affect foreign property ownership in Phuket?
The Thai government is expected to maintain its current policies, allowing foreigners to own up to 49% of a condominium building.
There are no significant changes anticipated in the regulations governing foreign ownership of land.
Investors should stay informed about any policy updates that could impact their property rights.
What are the risks associated with investing in Phuket real estate in 2025?
One of the primary risks is the potential for natural disasters, such as tsunamis, which could affect property values and insurance costs.
Market volatility and changes in tourism trends could also impact the profitability of real estate investments.
Investors should conduct thorough due diligence and consider diversifying their portfolios to mitigate these risks.
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What are the most promising areas for real estate investment in Phuket in 2025?
Areas such as Patong, Kata, and Kamala are considered promising due to their popularity with tourists and ongoing development projects.
These locations offer a mix of luxury villas, condominiums, and beachfront properties that attract both short-term renters and long-term buyers.
Investors should also consider emerging areas with potential for growth, such as Rawai and Chalong.
How will the demand for eco-friendly properties influence the market in 2025?
The demand for eco-friendly properties is expected to increase, with more buyers seeking sustainable and energy-efficient homes.
Developers are likely to incorporate green building practices to meet this growing demand, potentially increasing property values.
Investors should consider properties with eco-friendly features as they may offer a competitive edge in the market.
What is the average price per square meter for properties in Phuket in 2025?
The average price per square meter for properties in Phuket is expected to be around THB 100,000 to THB 150,000 in 2025.
Prices can vary significantly depending on the property's location, type, and proximity to the beach.
Investors should compare prices across different areas to identify the best investment opportunities.
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How will the global economic climate affect Phuket's real estate market in 2025?
The global economic climate can influence Phuket's real estate market by affecting tourism and foreign investment levels.
A strong global economy may lead to increased demand for vacation properties, while economic downturns could slow market growth.
Investors should monitor global economic trends and consider their potential impact on the local market.
What financing options are available for foreign investors in Phuket real estate?
Foreign investors can access financing through local banks, which typically offer loans with interest rates of 5% to 7%.
Some developers also provide financing options directly to buyers, often with more flexible terms.
Investors should compare different financing options to find the most favorable terms for their investment.
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=> Buying a property in Thailand as a foreigner: a complete guide
How will the digital nomad trend impact the Phuket real estate market in 2025?
The rise of digital nomads is expected to increase demand for long-term rental properties in Phuket.
Properties with reliable internet connectivity and proximity to coworking spaces are likely to be particularly attractive to this demographic.
Investors should consider catering to the needs of digital nomads to capitalize on this growing trend.
What are the tax implications for foreign property owners in Phuket?
Foreign property owners in Phuket are subject to a property tax of 0.01% to 0.1% of the property's assessed value.
Rental income is also subject to a withholding tax of 15% for non-resident foreigners.
Investors should consult with a local tax advisor to understand their tax obligations and optimize their investment strategy.