Real estate in Thailand is in high demand among foreign investors thanks to the Thai government’s incentives and the country’s economic growth. In 2022, most overseas buyers were from China, the US, the UK, France, and Germany. Investors are mainly interested in resort regions, particularly the island of Phuket. Statistics show that in 2022, foreigners purchased twice as many apartments in Phuket as in 2021. Property in popular locations allows you to receive a stable rental income, which reaches 10% per annum in the most promising areas.
Content:
- Advantages of North Phuket
- Nai Thon
- Nai Yang
- Property prices in Nai Yang and Nai Thon
- Foreign property purchases
- Return on investment
- Selection and purchase of real estate in North Phuket
Once lockdowns were lifted, the Thai property market began to rapidly recover, which led to a brisk rise in prices. For example, before the pandemic, an off-plan apartment could be purchased for $70,000–80,000, while by May 2023; similar properties were for sale for as much as $130,000. However, many experts believe the cost of housing in the country has not yet reached its peak and will continue to grow. All this suggests that today is the right time to buy an investment house or apartment in Thailand. One of the popular destinations for investing in resort housing is North Phuket.
Advantages of North Phuket
North Phuket is a good choice for investing in resort property for a number of reasons, including:
- There is an international airport, which is the third busiest airport in Thailand. It receives direct flights from 20 countries of the world.
- It has wide sandy beaches with residential and hotel complexes along them.
- The warm climate with winters that are not harsh at all provides a year-round influx of tourists. The high season lasts from October to April. During this period, the occupancy of rental housing reaches 100%. From May to October, the flow of tourists decreases, but the occupancy of hotels and rental houses and apartments still does not drop below 50%.
- Taxes when buying property are low.
- The average cost of real estate is $3,200 per sq. m. Investors can purchase a profitable investment property for $100,000.
- There is high-quality infrastructure for life and recreation: international schools, medical clinics with top-quality services, and shops.
Among the most attractive locations for buying investment housing in Phuket are Nai Thon and Nai Yang, located near the namesake beaches. Let’s look at these areas in more detail.
Nai Thon
Nai Thon is a quiet resort area a 15-minute drive from Phuket Airport. The location is mostly chosen by tourists with children and those who prefer a relaxing holiday on the sea coast. You cannot hear or see planes here, unlike other beaches in Thailand. The coastline of yellow sand is quite wide, and its length is 1 km.
Since the beach is pristine, there are no noisy cafes, restaurants, and clubs. All food outlets can be found on the street across the road from the beach. It may seem that the place is not suitable for tourists, but many travellers, on the contrary, prefer to live and spend their holidays in Nai Thon, as here you can truly disconnect from the bustle of the city in peace and solitude, and meditate or do yoga, admiring the beautiful views of the sea horizon.
The Nai Thon area stretches along the beach. There are cafes, restaurants, shops, hotels, guesthouses, residential complexes, and villas sitting on a hill near the coastline. Hotels in the area are scarce, but there are plenty of tourists during the high season. For this reason, investors can safely consider Nai Thon as a promising place to invest in rental housing.
Nai Yang
Nai Yang is one of the most picturesque beaches in the northern part of Phuket. A line of tropical trees runs along the coast, and there are no waves at all, so the water here is very clean. The resort area of Nai Yang is the closest to the local airport. You can even walk to it. Also within walking distance is a popular spot where you can watch low-flying planes. The beach is almost empty during the day, but it comes alive in the evening.
The beach features tables with umbrellas, sun loungers, and sea view cafes. There are also many establishments on the street along the coast. Their menus offer both traditional delicacies and European cuisine dishes. Along the coastline are numerous boutiques selling clothing, cosmetics, and essentials, and small grocery stores. Traditional fast-food carts are widespread here. There is a park in the area, where many people have picnics in the shade of old trees.
Housing in Nai Yang comprises villas and apartment buildings. Rental properties by the sea are popular among tourists, so it is more profitable for investors to buy units in residential complexes close to the beach.
Property prices in Nai Yang and Nai Thon
In the popular resort areas near the beaches of Nai Yang and Nai Thon, you can find quality apartments and houses. Prices depend on the total area of the property, its distance from the beach, and the type of residential complex.
For example, in Nai Yang, a finished 36 m² studio apartment is for sale for $110,000. A luxurious 260 m² Thai-style house with 3 bedrooms and a private swimming pool will cost the buyer $242,000.
The cost of a 37 m² studio near Nai Thon Beach is $153,000. In the same area, a 220 m² 2-storey villa in a contemporary minimalist style is for sale for $223,000.
Foreign property purchases
Foreign buyers can either fully own apartments and houses in Thailand (freehold) or own them for 30 years (leasehold), with the period renewable up to 90 years. It is important to note that it is impossible to buy the land on which the property stands.
It is advantageous for investors to purchase housing as long-term leaseholders, since the cost of such properties is usually 5–10% lower than those that are sold freehold. Also, when registering a leasehold transaction, the tax will be 1.1% of the property value. When buying a freehold house or apartment, the rate is 2%. You may sell or bequeath a purchased leasehold property. In case of a sale, you will not have to pay income tax.
Individuals heavily investing in real estate in Thailand are eligible for a long-term visa for a period of 5 years. The amount of investment must be at least $500,000. When applying for a visa, you will need to prove an annual income of at least $80,000 and assets worth at least $1 million.
Return on investment
Most Phuket resort residential complexes offer optimum options for investors who want to invest in local real estate.
The investor can conclude a contract with the management company and receive a fixed profit of 5-7% per year. Such an agreement protects the owner from the risk of their property sitting vacant.
Another option is a rental pool agreement, when the profit from renting out all the apartments in a complex is summed up and distributed among the owners according to the size of the living space. An amount of 30–40% is deducted from the total income, which covers the services of the management company. With this arrangement, owners can make bigger profits, reaching 10% in high seasons.
There is also a mixed option, when the management company can set a minimum guaranteed return and distribute the rest of the profit under a rental pool arrangement.
Today, many new residential properties are being built in Phuket. Developers offer to purchase off-plan real estate at an attractive price, allowing buyers to pay in instalments throughout the construction period. Many investors invest in such houses and apartments, and by the time a building is commissioned, they go up in price by up to 30%.
If the buyer has the opportunity to pay for an off-plan property immediately, the developer can offer a 5–10% discount.
Selection and purchase of real estate in North Phuket
You can view apartments and houses available for purchase in North Phuket in the catalogue of our website. It contains current listings from developers and real estate agencies with prices, photos, and descriptions.
Using a convenient search system, you can easily select apartments and houses by their cost, total area, location, and other features. You can explore all suitable market offers, compare prices and technical details, and choose the best options for a profitable investment.