Phuket property market shifts to year-round residents as infrastructure and retail draw longer-term demand

Phuket's property market is expanding beyond holiday homes, driven by infrastructure investment, new retail and growing numbers of year-round residents. Developers report rising demand from Thai workers, expats and families, while luxury villa sales jumped 45% in the first half of 2026.

Phuket's property market continues to expand despite a slowdown in Thailand's broader housing sector, supported by infrastructure investment, new commercial developments and a growing population relocating to the island. The market is now driven more by residents who live and work in Phuket year-round than by holidaymakers and second-home buyers alone, said Poomchai Mattayompoppinyo, managing director of SET-listed developer Sansiri's southern region project development.

Investment in transport, healthcare, education and retail facilities is creating employment opportunities and attracting both Thai nationals from other provinces and expats seeking longer-term homes, said Mr Poomchai. Major expressway projects include the Kathu-Patong and Muang Mai-Koh Kaew-Kathu roads, alongside traffic improvements across the island. Healthcare investment is expanding with new hospitals and wellness services, while Phuket now has 19 international schools with more than 5,000 students from over 50 nationalities, according to Sansiri. The number of international schools rose 51% over three years, reflecting growing demand among relocating families.

Retail development is another important driver. Tritecha Tangmatitham, managing director of SET-listed developer Supalai, said the launch of IconPhuket led to a sharp increase in sales at Supalai condos located about two kilometres away, with 40 units sold within one month compared with the usual rate of five units per month. Central Phuket is planning a 7-billion-baht expansion, and IconPhuket is expected to add another major shopping and lifestyle destination.

Rental returns in some parts of Phuket are attracting investors. Mr Tritecha said properties in Thep Krasattri could generate gross rental yields of more than 10% based on prevailing selling prices and rental rates. A townhouse priced at 3 million baht could command monthly rent of roughly 36,000 baht, while a detached house worth around 10 million baht could fetch 100,000 baht per month. In the more established Bang Tao and Cherngtalay areas, Mr Poomchai said luxury villas could generate net rental yields of 6% to 8%. A luxury villa worth around 40 million baht could earn 300,000 to 400,000 baht per month under a one-year rental contract.

Property consultancy Savills Thailand reported 763 new pool villas were introduced in Phuket during the first half of 2026 across 52 projects, with full-year launches forecast to reach roughly 1,200 units. Sales totalled 389 units in the first half, indicating demand was more cautious amid economic uncertainty. However, luxury projects in prime locations and those developed by reputable brands continued to attract interest, suggesting the villa market is expanding but new supply is growing faster than buyers' willingness to commit across all segments. According to CBRE Thailand, sales in Phuket's luxury residential market rose 45% in the first half of 2026 compared with the second half of 2025. Bang Tao and Cherngtalay remained the most sought-after locations. Foreign buyers accounted for 67% of condo and villa purchasers, with Thais making up 33%. The largest foreign buying markets comprised the UK, Russia, Canada, the US, Europe and India.

Developers are adjusting sales strategies to address concerns among foreign buyers. Sansiri is introducing completed-before-sale villas to give buyers greater confidence that the homes they purchase match the finished product. Mr Poomchai said he expects the completed-villa model to achieve sales of one unit per month, compared with an estimated market average of half a unit per month. He cautioned that Phuket's property market is not uniformly strong, and developers entering the market must identify whether demand comes from permanent residents, tourism-related workers, expat families, holiday-home buyers or investors seeking rental income.