Why are Russians actively investing in real estate in Phuket?

Thailand's popularity among foreign investors

In recent years, there has been a noticeable increase in interest from foreign investors in Thailand, particularly in the real estate and tourism sectors. The country has established itself as a stable and open market, making it extremely attractive for overseas investments.

Phuket - a center of investment attractiveness

Phuket, known as a popular resort, has become an especially desirable location for foreign investors. The real estate market on the island is showing impressive growth both in the short term and long term, creating new financing opportunities.

Why do Russian investors choose Phuket?

What is the reason for the growing interest of Russian investors in real estate in Phuket? First of all, it is due to the increasing demand for resort real estate, which is caused by the constantly developing infrastructure of the region. Relevant factors are also:

• Low entry thresholdfor investments in new buildings;
• Small tax ratesmaking such investments less costly;
• Loyal visa conditionsand convenient transportation connections.

A stable flow of tourists and rental income

Phuket, thanks to its year-round tourist season, enjoys a steady flow of visitors, which positively impacts rental income. Rental yields in this region can reach up to 10% per year, and property prices can increase by up to 30% during the construction process.

Investment flexibility

The variety of payment methods and the ability to participate in transactions remotely make the investment process simpler and more convenient. When choosing an investment property, many wonder whether to go for a condominium or a villa. Phuket is a quite attractive location for investments in 2023.

Current investment trends

Against the backdrop of a growing number of transactions by foreign buyers, Russians rank second after Chinese investors. The interest of Russians in real estate in Phuket remains high, despite the fact that they initially considered purchasing property solely for vacation purposes.

Change of investment strategy

However, today the focus is shifting towards investment, which is clearly evidenced by the increasing number of transactions in the market. Investing in Phuket resort real estate provides not only high rental income, but also serves as a reliable way to preserve capital. The diversity in the Phuket real estate market is its main advantage.

Prospects for real estate price growth

Despite the significant rise in residential real estate prices after the pandemic, there is still a great potential for further increases. There is a noticeable return of foreign investors, especially from China, which creates conditions for continued price growth.

Developers and international interest

It is noteworthy that Phuket attracts developers from all over the world, including major companies from Bangkok and Russian-speaking developers who have established themselves in the market. With the increasing flow of tourists, especially from China, the demand for housing and tourism in this region continues to grow.

Dynamics of transactions in the real estate market

According to data from the State Housing Bank of Thailand, the number of transactions made by foreigners to purchase apartments in the country increased by 82.3% in 2022 compared to 2021. Russians have confidently held the second position among the most active investors for the past five years, only behind the Chinese.

International interest in Phuket

Following the Russians, buyers from the USA, UK, and France are also showing interest, highlighting the international appeal of real estate in Phuket.

The difference in preferences among clients from different countries is clearly evident: Chinese investors show a strong interest in real estate in major cities like Bangkok and Chiang Mai, while Russians and Europeans more often choose resorts such as Phuket, Samui, Koh Chang, and Koh Lanta for their purchases.

GHB experts say the second half of 2022 will see a rebound in foreigners' interest in buying homes, due to the opening of borders at the end of the pandemic and the increased activity of Chinese buyers in the real estate market.

Stability of the real estate market in Thailand

Thailand continues to demonstrate reliability and attractiveness for investments. Over the past ten years, property prices in the country have increased on average by 1-10% annually, remaining stable and not subject to significant fluctuations. This is evidenced by data from the Bank of Thailand regarding the housing price index.

Since the end of the pandemic, there has been almost a twofold increase in prices for new apartments in the resort areas of Phuket in a short period of time. For example, before the lockdowns, small apartments in under-construction residential complexes cost around 70-80 thousand dollars, while in May 2023, similar properties were already being sold for prices starting at 130 thousand dollars.

New offers in the real estate market

Svitlana Romaniuk, a leading real estate specialist in Phuket, reports a large number of new offers in the region. At the moment there is an opportunity to buy, for example, a turnkey studio for $157,000, located 700 meters from Bang Tao Beach, with a total area of 30 square meters.

In other areas of Phuket, there are also various options available, including:

• studio for $176,000 (38 m²);
• one-bedroom apartment for $187,000 (72 m²);
• two-bedroom accommodation for $183,000 (452 sq. ft.);
• Studios and apartments with a variety of floor plans ranging from $112,000 to $229,000.

The exchange rate of the Tenge and its impact on investments

The national currency of Thailand, the baht, has shown stability against the US dollar over the past 20 years. The exchange rate has varied between 32 and 35 baht per dollar, but in 2022 there was a temporary decline when the rate reached 38 baht per dollar.

However, by the end of the same year, the currency authorities managed to bring the exchange rate back to below 35 baht per dollar, which positively affected investor sentiment. This stability allows for a comparison of real estate investment returns with those in dollars.

Friendly jurisdiction for foreigners

Thailand has established itself as a friendly jurisdiction with minimal restrictions on the right to purchase real estate. Foreigners are completely free to purchase real estate and open bank accounts.

Russian citizens are allowed to enter without a visa for up to 30 days, but the authorities of both countries are actively discussing the possibility of extending this period to 90 days, which could enhance investment flows and increase interest in the real estate market.

Thus, Thailand continues to be an attractive destination for foreign investors, opening up the market and creating comfortable conditions for living and doing business.

The active real estate market in Phuket

In Phuket, a market oriented towards international investors is actively taking shape. The development of the tourism industry on this picturesque island began about forty years ago, particularly in the Laguna area. It was then that an entrepreneur from China purchased a plot of land in Bang Tao, where tin mines used to be located. Over the course of a decade, his efforts transformed the face of the region: he opened the first hotel, which served as the foundation for the further development of the resort.

After only thirty years, Phuket has become one of Southeast Asia's top tourist destinations, attracting not only vacationers but also developers and investors, among them mostly foreigners.

Russian investors in Phuket

Russian investors have only recently started actively purchasing real estate in Phuket. Although Russian capital has long been directed towards Thai resorts, Phuket has become one of the most attractive markets. As a real estate specialist who has been working on the island for over sixteen years, I know several Russian-speaking developers who successfully implement resort housing projects. Russian-speaking buyers make up a significant portion of the real estate market in Phuket.

Statistics on real estate transactions

According to data provided by the Real Estate Information Center (REIC), 637 transactions involving apartments in condominiums were registered in 2022. This number is twice as high as in the previous two years and 26% higher than the level in 2019, which is considered pre-pandemic. However, it is worth noting that this statistic only covers completed properties and does not include transactions at the construction stage. In my observations, the overwhelming majority of purchases occurred during the building phase, and this data will only be reflected in the statistics from 2023 to 2025.

Interest in buying real estate in 2023

In 2023, interest in purchasing real estate is on the rise. According to the provided data, the number of inquiries from Russian citizens about buying property in Thailand increased by 57% in the first quarter of the year. Part of this growth is related to the situation in the Turkish market, where we can observe:

• Sharp rise in prices at Antalya resorts;
• Complications in the process of obtaining a residence permit;
• Concerns about earthquakes.

As a result, many investors are beginning to consider investment options outside of Turkey, and Thai real estate is becoming an attractive alternative.

Real estate offers in Phuket

The real estate market in Phuket offers a variety of options, including new developments. For example, a new premium villa project in the Thep Kasattri area of Thalang starts at a price of $1,144,000. Construction is expected to be completed in 2025.

There is a steady increase in interest and demand in the market, which is a positive sign for future investments in this region. Investment opportunities here are becoming increasingly attractive, highlighting the dynamic development of the market. The future of Phuket looks promising for foreign investors seeking stable and profitable assets in a growing economy. Thus, Phuket continues to attract attention, reaffirming its position as a key destination for international investments.

Real estate in Phuket

In the Phuket region, which is located in Thailand, a variety of attractive real estate options are available. This includes both luxurious villas and modern residential complexes.

Luxury villas

• For example, for $789,000, you can become the owner of a two-story villa featuring a spacious pool, a cozy terrace, and a well-maintained garden.
• This property is located in the neighborhood of well known golf clubs and beautiful beaches in the Pasak area.
• The total area of the villa is 488 square meters and includes four bedrooms.

Luxury villa

In addition, a three-story luxury villa deserves special attention, with prices starting at $683,000. It is also located in Pasak and offers an excellent location near the beach, golf clubs, and international educational institutions.

• The area of this villa is 228 square meters.
• It provides for three bedrooms.

Elite residential complex

For those interested in new elite complexes, there is a wonderful opportunity to invest in a project that will be completed in 2026. It is located in close proximity to Bang Tao Beach and offers a total of 789 apartments, with prices starting from $111,000.

Modern villas

It's worth noting the modern villas that are currently being actively built in Phuket. Each of these villas is equipped with its own pool and cozy relaxation areas.

• Prices for these properties start at $722,000.
• The completion of a magnificent new residential complex, featuring luxurious villas with pools, is expected in 2023.
• This project includes 54 offers, with prices starting at $1,592,000.

Exclusive complex

In addition, there is a unique complex located within walking distance of Bang Tao Beach, with prices starting from $182,000. The completion of this project is scheduled for 2025.

Resort condominium

A large resort condominium is also actively being built in Phuket, available for investment.

Luxury hotels and infrastructure

This part of the island is home to the most elite hotels and resort condominiums, attracting wealthy tourists from around the world. The developed infrastructure and careful organization of spaces in the areas and on the beaches contribute to a high occupancy rate of residential properties. Phuket's infrastructure allows for both short-term vacations and comfortable long-term living.

Education and medical services

There are more than ten international educational institutions on the island offering education based on American, British, Canadian, French, Finnish, and Russian standards. Medical services in private clinics in Phuket meet high international quality standards. Among them stands out an international school with a British educational program, providing an excellent level of education.

Entertainment and transportation

Phuket pleases with a variety of restaurants, shopping centers, car rentals and fairly high quality roads, which attracts both foreign professionals and wintering tourists, as well as those traveling for medical treatment from various developed countries. It is for this reason that even under quarantine, life in Phuket continued to go on and property owners collected profits.

Availability of real estate

Entering the new construction market is quite accessible.

• Compact apartmentsYou can purchase an area of 30–40 m² in condominiums with developed infrastructure starting from 100,000 US dollars.
• Price per square meterIt starts at $3,200.
• New small villasIn less in-demand fields, you can find opportunities starting from $250,000.
• Spacious villaWith well-maintained grounds and a pool in investment-attractive areas, prices start from 1 million dollars.

Tax system

The tax system in Thailand is characterized by low rates for both buyers and property owners.

The tax rates vary depending on the type of ownership — leasehold or freehold:

• For investors:The leasehold form is more advantageous: the tax on the registration of ownership rights is only 1.1%.
• Lickhold real estate:It turns out to be at least 5% cheaper than in freehold, and it doesn't need to be declared.
• When selling leasehold properties:There is no capital gains tax.
• Inheritance Tax:It is not charged if the property value is below 100 million baht (approximately 2.9 million dollars).

Visa regime and transportation

In addition, Phuket is known for its convenient visa regime and good transport accessibility. In the north of the island, there is Phuket International Airport, which ranks second in terms of capacity in Thailand.

Direct flights to Phuket are available from more than 20 countries, and there are regular flights from several major cities in Russia. The trip from the airport to any point on the island takes no more than an hour. This attention from the Thai authorities to international tourism is also supported by simplified visa requirements.

Citizens of over 60 countriescan visit Thailand without having to apply for a visa in advance.

Visa-free entry to Thailand

The standard visa-free entry period in Thailand is 30 days, but it can occasionally be extended to 45 days. If you need more time, you can extend it for an additional 30 days by visiting one of the local immigration offices in Thailand and paying a fee of 1,900 baht (which is about 55 US dollars).

Options for long-term stay visas

For tourists planning a long stay in Phuket, it is also possible to obtain a business visa if you have a registered company, as well as student visas if you intend to study, for example, in a language school.

Many foreigners with children enroll them in local schools and kindergartens, obtaining student visas for them while securing guardianship visas for themselves.

Easier visa options are also available for affluent travelers who prefer to avoid the complexities of visa applications. The Thailand Elite program offers a paid membership that includes enhanced services and the right to multiple border crossings.

• The most affordable package is -Elite Easy AccessIt will cost you for 5 years600,000 bahtApproximately17,500 dollars).

Investments in real estate and long-term visas

If you are considering investing in real estate in Thailand for an amount over500,000 dollarsCan I get a long-term visa?LTRfor a period of5 yearsHowever, to formalize it, it is necessary to confirm the presence of assets of at least1 million dollarsand ensure a minimum annual income of80,000 dollars.

If you need more detailed information about visas to Thailand, we recommend you to read our specialized article.

Climate and tourist flow in Phuket

Phuket attracts tourists year-round due to a steady flow of visitors and high rental yields. During the winter months, from November to February, the air temperature ranges from +22 to +27 degrees Celsius, creating ideal conditions for a vacation.

Many tourists choose to travel to Phuket in March and April, when the temperature rises to +35 degrees Celsius and the water warms up to +29. From May to October, when the monsoon season begins, the moderately warm weather attracts both surfers and ordinary vacationers.

Seasonality and hotel occupancy

The high tourist season, which lasts from October to April, is characterized by maximum hotel occupancy, sometimes reaching 100%. The low season, which begins in May, leads to a decrease in the number of arrivals to Phuket, but this is no more than 50% of peak levels.

Hotel occupancy at this time depends on the quality of management and rating on popular booking platforms. Hotels managed by international brands and experienced managers are able to maintain stable occupancy and high room rates, even during the summer period.

The popularity of Phuket among tourists

The beaches of Phuket are quite crowded even in the peak of the low season, despite the restrictions caused by the COVID-19 pandemic. This indicates that the island remains a popular destination for tourists looking to relax by the warm sea and enjoy the local culture.

Phuket does offer plenty of recreational opportunities, which attracts both locals and international visitors looking to spend time in this beautiful place.

Current conditions of real estate transactions in Thailand

In Thailand, especially on the picturesque island of Phuket, the real estate market has fully adapted to modern realities. Construction companies and international investors are increasingly using email to exchange relevant documents. For property ownership registration, there is an option to use the services of a competent lawyer who is authorized to represent the client's interests in land organizations.

Ways to pay for real estate in Phuket

In Phuket, developers offer a variety of payment methods. In addition to classic methods such as bank transfers and cash, cryptocurrency payments are becoming increasingly popular. In 2018, the state began to license crypto exchanges, which is in line with the law on digital assets and confirms the legality of such financial transactions. In case of payment using cryptocurrency, the seller converts the funds into Thai baht and receives proof of the completed transaction.

Our services

We also have an office in Phuket, where we offer a full range of real estate transaction services. Our team of professionals, consisting of managers and lawyers, will provide the necessary support at all stages of the process without increasing the client's costs for purchasing property.

Long-term investments in resort real estate

In terms of possible profits from resort properties in Phuket, condominium rentals are able to provide owners with income ranging from5% to 12%annual in Thai baht. Moreover, the value of such properties may increase by as much as30%as they are being built.

Market offerings

Currently, the market offers76applications for condominiums for sale. For example, among the available options are:

• Spacious one-bedroom apartments located in close proximity to Surin Beach, with a total area of39 m²at the price$117,000.
• An apartment with a stunning view of the bay in a modern residential complex with a swimming pool and gym, with an area of222 m², at a cost of$546,000.
• One-bedroom apartment complex between Surin and Bangtao beaches, area of36 square meters, at the price$191,000.
• Luxury two-bedroom apartments in a prestigious area of Phuket, just a short distance from...800 metersfrom Bangtao, total area88 m², the cost of which is$356,000.
• A spacious one-bedroom apartment just in5 minutesfrom Patong Beach, with an area of74 m²at the price$314,000.
• Fully furnished one-bedroom apartments located in200 metersfrom Rawai Beach, with a total area42 m², the price of which is$152,000.
• One-bedroom apartment between Surin and Bang Tao beaches, with an area of57 square metersin terms of cost$202,000.
• A one-bedroom apartment in a unique residential complex with developed infrastructure near Nai Yang Beach, with an area of40 square meters, at a cost of$128,000.

Management and rental income

Companies managing condominiums in Phuket offer apartment owners several income distribution schemes from renting out their properties to tourists. There are two main options: the first is a guaranteed income. Under a long-term agreement, which can last up tofive yearsThe owner is guaranteed a fixed income of at least5 to 7%from the value of real estate. This approach helps to minimize potential risks and provides stable income for investors.

Guaranteed income in the real estate market

A contract offering guaranteed income is a reliable way to minimize financial risks that may arise from the downtime of properties or other circumstances affecting profitability. Within the rental pool, all rental income from the apartments in the residential complex is pooled into an account managed by the management company.

Then the funds are distributed among the property owners in proportion to their ownership share, taking into account the management company's fees, which can range from30% to 40%Despite the fact that the rental pool concept may raise concerns, it offers a chance to earn more. In successful tourist seasons, such as 2022 and the early months of 2023, the returns for owners can exceed more.10% per yearbefore tax payment.

Mixed rental models

In addition, mixed models have become popular, in which management companies set a minimum income level (guaranteed income), and all additional profits are shared based on the rental pool principle. If you are interested in which rental strategy in Phuket is the most profitable, we recommend checking out our article on this topic.

The rise in real estate prices in Phuket

The rise in property prices in Phuket during the construction period is also of interest. Many developers do not resort to bank loans to finance their projects. The process of acquiring land, developing project documentation, obtaining the necessary permits, and starting construction is often carried out using the developer's own funds, while part of the financing comes from advance payments from buyers.

Thus, there is significant potential for savings when purchasing new buildings in Phuket, which can reach30%.

Protection of consumer rights

In those countries where the purchase of under-construction real estate is done through escrow accounts that reliably protect the interests of clients, buyers at the initial stage of construction do not have the opportunity to benefit from this.

Bonuses for prepayment

Elena Milishenkova, who holds the position of commercial director, notes that bonuses when purchasing new construction housing can be significantly increased if full payment is made at the start of construction and if one refrains from opting for installment payments.

For full prepayment at an early stage, developers are willing to offer additional discounts, which can range from5% to 10%.

Installment plan for ready-made housing

In Phuket, the use of installment payments is quite common even for completed properties, which means that the total payment amount is divided into stages of construction. This implies that the amount of investment will always be proportional to the actual value of the property, which includes the price of the land and the cost of the constructed buildings.

A similar installment plan is available for all projects in Phuket. Some developers offer clients the option to purchase ready-made investment properties with an installment plan.

Advantages of installment payments

In such a situation, the property can start generating rental income almost immediately after signing the contract and making the first payment. The remaining amount is divided into several stages, which can be scheduled for a period of1 to 5 yearstaking into account the commission from3% to 7%depending on the terms of the installment plan.

Payment and financing in the real estate market

The financing option known as installment payments for ready-made real estate shares some common features with mortgage lending; however, the differences in the principles of organizing this scheme are quite significant. Here, the funds are provided not by banks, but directly by the developer, and the buyer's ownership rights to the purchased property arise only after the full repayment of the installment plan. For foreign investors in Thailand, obtaining a mortgage is not possible.

At the moment, only one financial institution offers housing loans with an interest rate starting from9%and above per year. Now let's analyze what is better for investments in this South Asian country: a condominium or a villa.

The villa market in Phuket

According to the dataREICThe risks of investing in real estate, especially in villas in Phuket, are significantly lower.2022In that year, this resort registered149 villa sales, what in4.5 timesmore than in2021in the year, and on14%more compared to2019the year when there were still no restrictions.

Interest in villas in Phuket continues to grow, and they are often offered for long-term rental, which remains quite popular.

Long-term rental and its benefits

Long-term rentals of new, luxury villas are often finalized even before their construction is completed. The main tenants are:

• Digital nomads
• Families with children studying in international educational institutions
• People coming to a tropical island to give birth or for maternity leave.

The profit from long-term villa rentals amounts tomore than 6%per year.

Current offers in Phuket

Currently, Phuket is represented by357 sentenceson villas with prices starting from$1,144,000For example:

• New elite complex inThe Kasattri, Talang, completion of construction -2025year.
• Two-story villa with a large pool for$789,000, area488 m²4 bedrooms, near golf clubs and the beach inPasak, Phuket.
• Three-story luxury villas, price starting from$683,000, area228 m²3 bedrooms.
• Modern villas with pools from$722,000.
• A new residential complex with magnificent villas featuring swimming pools, built in2023in the year, the price from$1,592,000.

Other interesting suggestions

Also available:

• 51 objectan exclusive residential complex of villas with pools and sea views, delivery in2024in the year with prices starting from$583,000.
• A first-class residential complex of villas with private pools, which will also be delivered in2024In the year, the price starts from$371,000.
• A new complex of villas with pools in the golf club area, scheduled for completion in2024in the year with30 available sentences.

Investment prospects of Phuket

Phuket has become one of the most attractive destinations for real estate investment today.2023in the year. This is due to low taxes, high returns, a stable currency, a favorable climate, and well-developed infrastructure, which attract foreign investors. The entry threshold to the real estate market on the island is quite low — starting from$100,000.

Conclusion

In conclusion, I would like to note that the real estate market in Thailand, and particularly in Phuket, continues to attract the attention of international investors, including Russians, due to its unique advantages.

Reasons for investment

The reasons for investing are clear:stable price growth,high rental yieldandavailability of real estate propertiesThis makes the market particularly attractive.

Demand dynamics

With each passing year, the growing interest in real estate in Phuket is confirmed by statistical data showing that Russians continue to actively purchase property, increasingly solidifying their position among foreign buyers.

Diversity of objects

As a rapidly developing resort, Phuket offers a variety of investment opportunities, starting from:

• condominiums
• luxurious villas

Favorable conditions

What is especially pleasing isfavorable visa regimeanddemocratic tax conditionsfor foreign investors, which makes it easy and quick to complete a purchase.

Investment outlook

Considering all of the above, Phuket certainly deserves the attention of those looking for not just a vacation spot, but also a profitable investment that will generate income and appreciate in value.

Recommendation

Therefore, if you are considering investment opportunities in overseas real estate, I highly recommend looking into the offerings in Phuket. Here, you will find not only excellent living conditions but also great prospects for the long-term growth of your capital.

Investments in Phuket

Investing in residential real estate on this amazing island can not only be a smart financial move but also a gateway to a unique lifestyle in one of the most beautiful parts of the world.