In its comprehensive analysis of the 2023 vacation home market in Phuket, CBRE, a leading global real estate services and investment firm, reports a significant signal of recovery from the COVID-19 pandemic's impact. Notably, condominiums in Phuket demonstrated exceptional performance in the first half of 2023, achieving the highest sales volume in the past decade. Further solidifying this trend, as of Q3 2023, CBRE's transaction value in Phuket soared by 113% compared to the entire year of 2022. This remarkable growth is driven by three main factors: Phuket’s undeniable allure as a tourist haven, targeted rental management programs that cater to investor buyer needs and most condominium projects offering luxurious amenities and resident services. This combination has attracted both end-users seeking dream vacation homes and investors drawn to the island’s profitable rental potential for condominiums in Phuket.

Ms. Prakaipeth Meechoosarn, Head of Phuket Property Sales at CBRE Thailand, revealed that overall the villa and condominium market in Phuket has grown steadily since the easing of the COVID-19 pandemic. This is evident in the increasing number of luxury vacation home projects launched in Phuket, which reflects the developers’ confidence in the market. Specifically, condominiums achieved record-high sales with 1,486 units sold in the first half of 2023, the highest sales volume in the past 10 years. CBRE estimates that over 3,000 new condominium units will be launched in Phuket throughout 2023, an increase of 8.9% from 2022. This is more than double the average number of new condominiums launched from 2018 to 2022. The West Coast (central) area is the leading location for new condominium launches, with Bang Tao Beach and Layan Beach being the most popular destinations.

According to CBRE transactions as of Q3 2023, transaction value of condominiums in Phuket rose by 113% compared to the entire year of 2022, indicative of a robust market recovery. Notably, the nationality of buyers between Thai and foreigners are 50:50, with strong representation from European and Asian countries. The Russian, Chinese and British nationals are the leading foreign buyers and CBRE anticipates they will remain as the key potential buyers in the 2024 luxury condominium market. Interestingly, CBRE observes foreign buyers often visit Phuket multiple times, captivated by its vibrant lifestyle and stunning beaches, ultimately leading to their interest in purchasing vacation homes and investment rental properties. Furthermore, the rising interest from Middle Eastern and Indian buyers indicates a promising outlook for the overall Phuket condominium market in 2024.

Ms. Prakaipeth pointed out that the two main purposes for purchasing luxury vacation homes in Phuket are investment for rental, accounting for 79% and personal vacation homes or second homes, accounting for 21%.

CBRE’s investor clients are attracted to Phuket’s potential as a tourist destination, with its convenient transportation links, including direct flights from Bangkok and overseas. They are also optimistic about the island’s future growth, as evidenced by the planned expansion of Phuket International Airport, which is expected to be completed in 2028 and will be able to accommodate over 18 million visitors annually. The construction of the new highway Kathu-Pathong and new interchanges will also improve connectivity and accessibility to Phuket, making it an even more attractive destination for both tourists and expatriates. CBRE’s investor clients are particularly interested in the Bang Tao and Layan beach areas, which are home to some of the most beautiful beaches in Phuket. These beaches are well-connected to other key areas, such as Central Phuket, Robinsons Thalang, Phuket Old Town, golf courses, leading hospitals and international schools. The proximity to the airport and the abundance of luxury vacation homes make Bang Tao and Layan beaches an ideal location for both investors and end-users.

The key strengths of Phuket condominium for investment include rental management, which allows them to collect passive income through property rental, without the burden of managing the property and finding tenants. This is a great advantage for investors, with Phuket’s luxury condominiums consistently showing rental yields of 6%-8% per year, depending on interior design, unit size, view and project services.

In term of end-user buyers in Phuket’s condominium market, they prioritize distinctive designs, high-quality construction and the developer’s reputation. Many seek the ultimate vacation experience, favoring branded residences with five-star hotel services, such as 24/7 concierge and a full range of amenities. Prime locations, stunning views and well-equipped interiors with a range of facilities, from pools and fitness centers to golf courses and beaches, seal the deal for those seeking a luxurious escape or an indulgent second home.

Ms. Prakaipeth summarized “For the year 2024, CBRE believes that luxury condominiums in Phuket will continue to receive a good reception from Thai and foreign buyers who are looking for vacation homes for investment and personal use. Branded residences, which offer services that meet the standards of five-star hotel chains and integrated rental management, will be at the top of the list for luxury clients. This is because they are more convenient than general projects, and even if they are not occupied by the property, they can be rented out for better long-term profitability. The return of more and more foreign tourists to Phuket will also be a positive factor for the vacation home market in Phuket.”