Phuket Real Estate – Understanding Different Property Types

Phuket has the most mature resort property market in Thailand and offers a wide variety of residential property types, including apartments, condominiums, villas, detached houses, semi-detached/duplex homes, and townhouses. These properties come in an array of architectural styles, from striking contemporary to traditional Asian or Balinese influences. Buyers have access to a broad range of price points, with options such as garden-view homes, sea-view residences, and luxurious beachfront villas. Phuket’s varied and dynamic real estate market offers opportunities for investors to purchase properties off-plan, under construction, or completed, catering to different preferences and investment strategies.

Villas, Houses, and Townhouses in Phuket

In Phuket, the terms ‘villa’ and ‘house’ are often used interchangeably, though houses tend to be associated with more affordable price points, whereas villas are typically luxury properties. Both types of property sit on their own land and may be detached or semi-detached, with or without a private pool. Townhouses, sometimes referred to as townhomes, are multi-level terraced houses developed in blocks. Although the end units in a block may technically be semi-detached, they are still generally marketed as townhouses. 

For foreign investors, purchasing a villa, house, or townhouse in Phuket requires navigating Thailand’s property ownership laws. Foreigners are prohibited from directly owning land in Thailand but can own the building(s) on the land. This gives rise to two common ownership structures:

1. Thai Limited Company Ownership: Investors use a Thai limited company to hold the freehold of the land. The company must be operated as a business for generating income, not purely holding structure for the land, with annual accounts submitted. The foreign investor will normally be a director in the company. For every foreign director, you need two Thai shareholders, who cannot be nominees. So, if you have one foreign director, you need a minimum of two Thai shareholders. The Thai shareholding also needs to be 51% or more.
2. Leasehold Ownership: Alternatively, a foreigner can lease the land for a period of 30 years. The longest residential lease period in Thailand is 30 years, so sometimes a developer will include options to renew the lease for additional 30-year periods within the sales price. The advantage of leasing the land is that it eliminates the need for having company, but the term of ownership is limited.

Condominiums vs. Apartments

Though the terms ‘condominium’ and ‘apartment’ are sometimes used interchangeably, in Thailand they have distinct legal differences. A condominium in Thailand is a unit in a development with a condominium license, allowing foreigners to own up to 49% of the building’s private living space on a freehold basis. The units allocated for foreign freehold ownership are known as the Foreign Quota. The remaining units make up the Thai Quota.  This makes freehold condominiums especially attractive to foreign buyers, as they own a condo from the Foreign Quota in perpetuity, with no concerns about lease length or renewals. 

An apartment does not come with the same ownership privileges. Apartments are generally sold on a leasehold basis, with the maximum lease term being 30 years, though contracts often include options for two further renewals, for a total of 90 years. Some apartments use a “protected leasehold” structure, where the leaseholder also owns shares in the company that holds the freehold. This provides additional security for lease renewals but still lacks the simplicity of freehold condominium ownership.

Why Condominiums and Apartments are Particularly Suited for Off-Plan Investments

Condominiums and apartments are often marketed off-plan, meaning buyers can purchase a unit before construction is completed. These property types, especially in larger developments, are well-suited for off-plan sales because they are often standardised—many units within a project will have the same design, layout, and features. This commoditised nature allows developers to offer attractive pricing during the pre-construction phase, giving investors the potential for capital appreciation by the time the property is completed. Buyers can also benefit from the opportunity to customise their unit to some extent during the building process, depending on the development. Larger villa projects with standardised designs are similarly suitable for off-plan sales, offering the same benefits of lower pre-construction pricing and potential for capital growth. 

Price Ranges for Property Types in Phuket

• Condos and Apartments: Entry-level condos and apartments in Phuket can be purchased for as little as $60,000 USD. Sea-view and beachfront units, especially penthouses on Phuket’s desirable west coast, can reach several million USD.
• Villas and Houses: Entry-level detached villas and townhouses start around $120,000 USD. Garden pool villas generally begin at $300,000 USD, while sea-view villas typically start around $600,000 USD. At the high end of the market, luxury oceanfront or beachfront villas can cost upwards of $20,000,000 USD. 

Historical Trends and Property Development in Phuket

Historically, most of Phuket’s residential properties were found along the island’s west coast, which is still the most sought-after area for high-end villas and luxury condominiums. Prime locations such as Kamala, Nai Thon Beach, and Surin Beach continue to command the highest prices due to their stunning sea views and beachfront access.

However, as the Phuket property market has matured and the supply of land on the west coast has become more limited, new developments have expanded to the south and east coasts, as well as inland. Popular inland areas include Kathu and Si Sunthon, while the east coast offers more peaceful and less-developed districts such as Pa Klok and Ko Kaeo. These emerging areas provide a wider range of property types at varying price points, attracting both investors and lifestyle buyers. 

Facilities and Maintenance Fees

Condominiums and apartments in Phuket typically come with a wide range of facilities, thanks to the scale of these developments. Even entry-level projects often include amenities such as communal swimming pools, gyms, and 24-hour security. Higher-end condo developments may offer additional features like spas, tennis courts, shuttle services, and in-house rental management, and sometimes private pools, making them particularly appealing to investors looking for resort-type income opportunities. 

Villas, on the other hand, generally offer more privacy and space, very often with private pools. While some villa developments include communal facilities, these are less common compared to condominium complexes. For standalone villas, buyers may enjoy complete independence but will miss out on the convenience of shared amenities.

Maintenance fees, also referred to as estate charges or HOA fees, apply to all property types within developments that offer communal services. These fees cover the upkeep of internal roads, utilities, and security, varying according to the level of facilities provided. Typically, maintenance fees are calculated per square meter of the property’s living space. For standalone villas, or those in collections with no communal aspect, maintenance fees will not apply. 

Which Types of Property Are Easier to Resell?

The ease of reselling a property depends on various factors, including location, property style, the reputation of the developer, available facilities, the condition of the unit, and the return on investment it offers. However, all things being equal, freehold condominiums are generally easier to resell than apartments. This is because a freehold condominium is owned in perpetuity, meaning there are no complications with lease renewals or concerns about the remaining years on a lease, making it a more straightforward and secure investment option for potential buyers. 

Villas owned on a freehold basis through a company holding structure (necessary for foreign investors) are also held in perpetuity. The resale of such properties is typically managed by transferring ownership of the company via a change of director. However, selling these types of properties requires a discerning buyer who is familiar with Thailand’s company holding structures, which can limit the pool of potential buyers. Additionally, if the due diligence on the existing company fails and a new company needs to be established for the acquisition, the process involves significant transactional costs, including company setup fees and government taxes as the land is transferred between companies, which can be a prohibitive factor in the sale.

For villas on a leasehold basis, reselling can be more challenging depending on how many years are left on the lease. As with leasehold apartments, unless buyers are confident about the ability to renew the lease, the remaining lease period can negatively impact resale potential. 

For expert, impartial advice on buying property in Phuket visit charlesdel.com