The progress of Phuket real estate continues.

The resilience of the tourism sector is boosting real estate sales in the province. Tourists are enjoying Mai Khao Beach in Phuket on February 13, 2023.

The influx of foreigners is supporting the growth of real estate on the island. The real estate market in Phuket is expected to continue its upward trend for at least another two years, thanks to strong growth in the tourism sector. The president of the Phuket Real Estate Association, Fattanun Fisutwimol, stated that foreign buyers, particularly Russians fleeing the war and Germans avoiding the energy crisis, are the key drivers of the real estate market recovery. "They have come in such large numbers that rental housing is fully occupied," he said. "Luxury villas have been in high demand, especially those near Laguna, which have been particularly popular among Russians, Chinese, and Europeans."

Mr. Fattanan said that Russian buyers purchased half of the project with villas by the pool, while other groups bought villas with pools to rent them out to their compatriots. The Real Estate Information Center (REIC) reported that the number of recently sold villas in Phuket last year increased more than fourfold, from 34 units in 2021 to 149 units in 2022. In the second half of 2022, 129 villas were sold, compared to 131 for the entire year of 2019.

Phuket ranked third in the country for the number of condominium sales to foreigners, trailing only Bangkok and Chonburi. Last year, 637 condominium units were sold on the island for a total of 3 billion baht, representing an 85% increase in units and a 53% increase in value compared to 345 units worth 1.95 billion baht in 2021.

“The number of condominium transactions in November and December 2022 was 30% higher than pre-Covid levels,” said Mr. Fattanun. “This momentum is expected to continue over the next two years due to a strong recovery in the tourism sector.” According to REIC, revenue from the tourism sector in Phuket soared to 139 billion baht in 2022, increasing more than tenfold after dropping to 13.1 billion baht in 2021. This is a significant improvement compared to the revenue of 87.5 billion baht in 2020, which fell from 393 billion in 2019 and 425 billion in 2018, according to the center.

“The recovery of the tourism sector has significantly impacted the revival of housing demand in Phuket, with a good sales rate for all categories of residential real estate in the second half of last year,” said Vichai Viratkapan, acting CEO of REIC.

Despite the thriving tourism industry and increasing revenues, many local hospitality workers still cannot get approval for a mortgage due to insufficient financial documentation and savings, Mr. Fattanan said. "Many people with genuine demand are unable to apply for a mortgage or make a down payment, as their savings have been depleted during the pandemic," he said.