In 2022, Russians took 1st place among foreign nationals interested in purchasing real estate in Thailand. With this ranking, they shifted the leading position of Chinese residents. Russians choose the kingdom not only for tourism or permanent residence but also for investing in real estate.
If you compare apartments in development projects in Thailand with housing in other popular countries, the prices in the kingdom will seem very attractive as they are still low. So, flats in Thailand are available in a modern house for $20,000, and $30,000 in a newly renovated residential complex with a swimming pool and infrastructure, a couple of hundred metres from the beach.
If you wish to purchase a residence as an investment, the best locations in the country will be Pattaya and Phuket, offering a wide selection of premium residential properties. Both places are extremely popular with both tourists and locals.
Content:
- Comparison of geographical features: Pattaya − on the mainland, Phuket − on the island
- Comparison of real estate options: in Pattaya − apartments, in Phuket − luxury villas
- Real estate cost comparison: Pattaya is cheaper
- Comparison of rental costs
- Comparison of tenants: to Phuket − for the beaches, to Pattaya − for entertainment
- Comparison of the percentage of return on investment: Phuket ahead
- Conclusion
Comparison of geographical features: Pattaya − on the mainland, Phuket − on the island
Let's start by comparing districts by their geographical features. Pattaya is a city on the mainland of the country. It’s located on the shore of the Gulf of Thailand and has a mild climate. There are no high waves or bad weather here, so housing is rented all year round. Tourists can come to Pattaya even during the rainy season as the showers here are usually short.
Phuket is an island separated from the mainland by a small strait and washed by the Indian Ocean. The weather here changes often, but tourists are attracted by the clear sea and paradise beaches. The main thing to remember is that the rainy season continues on the island from May to October. Moreover, it can rain without stopping. Therefore, tourists rarely come here in the summer. Although in 2022, due to the difficult situation in Russia and Europe, many residential properties on the island were rented out even during the low season, they will not be so popular in the coming years.
Comparison of real estate options: in Pattaya − apartments, in Phuket − luxury villas
Pattaya is an ordinary city that is predominately local. Most of the local housing consists of flats. There are many townhouses and a small selection of villas in the city, but not as diverse as on the islands, and the local villas are usually smaller.
Phuket is a more touristy place. The housing stock consists of condominiums and villas. In addition, the island offers real estate options for investors. These are residences with hotel management. This option brings a lower percentage of income than when renting out ordinary residential real estate with the help of realtors.
Real estate cost comparison: Pattaya is cheaper
If you look at the sales statistics for 2022, housing in Pattaya is far cheaper than in Phuket. E.g., in the centre of Pattaya, a square metre of real estate costs $1,915, and in Phuket – $2,904. However, the difference in the cost outside of the central areas is more impressive. This situation is explained by the fact that not only investors buy residences in Pattaya, but also Thai citizens who choose medium and economy-class housing.
You should buy luxury villas in Thailand in Phuket. Their cost starts at $100,000 and reaches $20 million for the ultra-luxurious mansions on the coast of the paradise island. Apartments in Phuket are for sale for $45,000 in the new residential complexes.
In Pattaya, the prices are far more modest. You can purchase a local apartment for $20,000, or a residence for $30,000 in a new complex. The starting price for houses in the city is $35,000, and for luxury townhouses − $70,000.
Comparison of rental costs
As expected from a tourist island, the cost of renting in Phuket is significantly higher than in Pattaya. The difference of any residence is at least 25-30%, except for the 1-bedroom flats. For renting out these modest residences in Pattaya, you can receive $60 more than on the island. This is because villas are the main demand among tenants in Phuket.
Renting out a house for tourists in Pattaya will bring $200 per month and renting out a villa on the island − from $600 per month. In addition, daily rent is in particular demand in Phuket.
Comparison of tenants: to Phuket − for the beaches, to Pattaya − for entertainment
Pattaya is a city with an active nightlife attracting young people. These travelers are looking for low-cost housing. Therefore, when investing in real estate in Pattaya, it makes sense to purchase studios and 1-bedroom flats.
Phuket offers a quieter and family-friendly vacation. Tourists come here to enjoy nature, the beaches, and the ocean. Residences by the sea are in high demand on the island, and tourists are looking for more luxurious and comfortable properties rather than cheap living options. Villas and condominiums with good social infrastructure are in the highest demand on the island. In recent years, there’s been a more noticeable trend to buy or rent more spacious residences than before.
Comparison of the percentage of return on investment: Phuket ahead
If you look at the return on investment, in Pattaya, the rental property annually brings about 5-5.4% of the amount of invested capital. In Phuket, this figure is 8-10% per annum for luxury villas.
Conclusion
There is a high demand for real estate in Thailand amongst the citizens of many countries. Prices for residential properties are not yet growing, but experts expect a sharp jump in property values in the best locations of the kingdom in the coming years. To fully capitalise on the situation, you should choose the area you are most interested in and purchase a property right away.
Real estate may Phuket cost more but will also bring about a higher income. However, during the rainy season, the houses here are often idle with no tenants. Housing in Pattaya is cheaper and will bring a more modest income, but the right home will be rented out all year round.
After weighing the pros and cons, each investor can find a suitable option in Pattaya or Phuket, depending on their budget and goals.