Phuket Villa Market Booms as Russians Flock to the Island

Thailand has reopened fully to welcome tourists and canceled its COVID-19 control measures since October last year. A large number of Russian tourists have traveled to Thailand, ranking third highest after Malaysian and Indian tourists, according to statistics from the Thai government.

Phuket as Thailand's tourist destinations have become lively again as more foreigners come to visit and stay long-term. Especially, the group of Russians who have fled war and sought to relocate to countries with policies welcoming foreign nationals have flocked to Phuket as a relaxing and peaceful destination, buying and renting villas, boosting Phuket real estate market.

Russians Driving High Demand for Phuket Villas

Phattanan Phisutvimol, the president of the Phuket Real Estate Association, said that currently there are many tourists coming to Phuket, particularly a group of Russians who come in with 100,000 people per day due to escaping the war to stay on the island. They often buy villas for 50-60 million baht as a residence, while some groups rent them for 6 months to 1 year, making the Phuket villa market popular and in high demand.

“The rental market is now insufficient, and rental rates have increased 2-3 times since the COVID period, where they were around 20,000 baht per month and now are 40,000-60,000 baht per month. Meanwhile, new projects are emerging, following the boom of villa sales. There are a lot of local investors, Thai companies and foreign investors who have established companies to invest in various areas, but not on a large scale. The project usually consists of 9 units priced between 10-100 million baht because a small project tends to be sold easier and If there are more than 9 units, permission to build a housing estate will be requested." said Phattanan.

What about Chinese Tourists and Investors in Phuket Villa Market?

Phattanan stated that there has been a rise in Chinese tourism since China's opening up. This includes various forms of tourism such as agencies buying condominiums or villas for Chinese customers or collaborating on housing projects. Nonetheless, it has not yet reached pre-COVID-19 levels.

"Chinese investors who are still not many may be because China has just opened up and investment is still the same group as before, combined with the fact that there are problems with real estate in China. Therefore, it is not as popular as the Russian group. But it is expected that the Chinese group will return strongly from mid-this year, which will make Phuket, which is now starting to be crowded, even more crowded as can be seen from the traffic jam." Phattanan said.

In the year 2022, there were foreign investment groups, including Chinese investors, who continuously invested in businesses in Phuket to support the recovery of tourism after the COVID-19 pandemic. These businesses include hotels that were purchased during the pandemic, real estate projects in collaboration with local entrepreneurs and established as companies with 51% Thai ownership as well as restaurants, mostly owned by Chinese people who do not live in China, but from Hong Kong and Macau.

Major Developers Investing in Phuket for Multi-Million Dollar Projects

Major real estate developers are currently investing in Phuket, with companies like Origin Property purchasing large plots of land ranging from 100-200 rai (approximately 40-80 acres), as well as, Sansiri, and Supalai.

The CEO of Asset Wise Public Company Limited (ASW), "Kromachet Viphanpong," recently announced that the company partnered with Botanica Luxury Phuket Co., Ltd. for the Botanica Grand Avenue project on Bang Tao Beach in Phuket. The project is worth over 10 billion baht (approximately $320 million) and has developed a luxury villa in Phuket on 178 rai (approximately 71 acres) of land, in the form of a leasehold. The unit prices range from 40-60 million baht (approximately $1.3-1.9 million), and the target customers are primarily foreigners, including Scandinavians, Europeans, Hong Kongers, Russians, and Chinese.

In conclusion, the Phuket villa market has experienced a surge in demand due to Russian buyers and renters drawn to the island's tranquil environment. This has led to increased rental rates and new real estate projects. Although Chinese investment is still recovering from the pandemic, it is expected to return strongly in mid-2023. So, investing in Phuket villas in 2023 could be a profitable opportunity given the island's growing appeal among foreign buyers and renters.