another publication by IMAGE asia

The Rise of the Thai Buyer

We experience trends everywhere in our daily lives.

  Various place in Phuket

We experience trends everywhere in our daily lives. Stock markets trend upward, our favourite sports teams go on winning streaks, or maybe we personally feel that – for a while at least – everything is going our way.

The important thing to remember about an upward trend is this: it always reverses itself, and the ensuing downward trend creates new opportunities. A perfect example of a reversing trend creating a new opportunity can be found right here in Phuket.

The pandemic ended a dynamic growth trend in tourism, which obviously had a knock-on effect on the property market. Catering to the year-on-year tourism growth, developers had long prioritised buy-to-let properties over villas and luxury condos for residential use.

But developers soon realised that while tourists were not able to travel during the pandemic, Phuket was experiencing an influx of expatriate residents unlike anything the island has experienced in over two decades. At the same time, these past three years have also seen an increasing number of villa sales to Thai nationals, making residential property construction – not buy-to-let – the new growing trend in Phuket.

Phuket property, both residential homes and rental units, has long been dominated by foreign money. The reason buy-to-let condominiums once outnumbered residential homes is the fact that foreigners can buy freehold condominiums in their own name, whereas they can only own landed property (villas, bungalows, or townhouses) through a legally compliant Thai company. The company must have proper Thai shareholders to whom dividends are paid, and adhere to all the corporation and income tax laws. The cost of complying with these requirements makes little financial sense to the person whose budget does not extend to a luxury villa.

Foreigners buying bungalows, townhouses, or other larger homes in a ‘moo baan’ (gated community) have therefore traditionally been married to a Thai spouse, who could own the house in his/her own name. The influx of money from middle class Thais is leading to a resurgence in the development of bungalows and moo baan developments, while investment from high net worth Thais and foreigners alike is driving more and more luxury villas.

As alluded to above, it was the pandemic which sparked greater interest in high-end Phuket real estate. During Covid lockdowns, most people in the world found themselves virtual prisoners in their own homes, which started as early as March, 2020 in Thailand. Working from home, restaurant delivery, and the only escape permitted was to the supermarket (although many also opted for grocery delivery). Whether in Bangkok, New York, London or Hong Kong, people grew tired of the inconvenience very quickly. Many of those with the means decided that, if they were going to face an extended lockdown or another one in the future, they would rather do so on a tropical island than in a dreary, rainy (or sometimes snowy) city.

This drove many Thais to either permanently escape Bangkok for Phuket, or to buy second homes here for a future ‘escape plan’. Another unique development is that some of the foreign money finding its way into the Phuket housing market is coming from Thai nationals.

Thais have been studying overseas in large numbers for two generations, and prior to the pandemic this trend had really accelerated. There are currently almost 16,000 Thai students at foreign universities, most of them in the UK, US, Australia and Canada (in that order). As with foreign students of any nationality, it is not uncommon for Thais to accept jobs in the country where they study, and to carry on living and working there. There are currently around 1.1 million Thai nationals living and working overseas, nearly one-third of whom are in the US.

Phuket has always been an attractive tourist destination for foreigners, but it was the Asian Financial Crisis in 1997 which put Phuket property on people’s investment radar. Starting in July 1997, the Thai Baht was ultimately devalued by almost 80% against the USD, and still trading at 40-to-1 five years later.The British Pound traded at more than 70-to-1. This made Thai Baht-denominated assets very attractive to overseas investors, another trend which is now repeating itself.

At the time of writing, we are witnessing the strongest USD:THB exchange rate in the last 15 years, and this is encouraging expatriate Thais to move their USD (or GBP or EUR) holdings back to Thailand to purchase properties for their eventual return or retirement, and the Phuket luxury villa market has been a major beneficiary of this trend.

But it is not just wealthy Bangkokians and Thai expats driving this market. Middle class Thais are currently snapping up bungalows and moo baan townhouses, leading to increased demand for more such developments.

This increased ‘domestic’ demand for Phuket property is significant for another reason: Thai nationals can borrow money to finance their purchases. The foreigner dominated property market during the last two decades has relied on cash purchases because foreigners by and large cannot take mortgages from Thai banks. The fact that there is a growing number of buyers who can take out housing loans means this segment of the markets has more room to grow.

Despite the setbacks brought on by the pandemic, which were global phenomena, Thailand remains a growing economy. If the standard of living and GDP continue to grow then this trend toward middle class and high net worth Thais investing in homes or second homes in Phuket is unlikely to reverse itself anytime soon.

by Thai Residential Phuket Property Guide
This article is from the Thai Residential Phuket Property Guide. To download the 2019/2020 Guide visit

 Contact info:

Thai Residential
82/37 Sam Pao Courtyard
Moo 4, Patak Road
T.Rawai, Phuket 83130
+66 94 8411 918
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