A new villa launched this year in Phuket. The island continues to draw potential property buyers despite a sagging economy.

Despite a weak first half and the continued absence of Chinese buyers, Phuket's residential market in 2025 is expected to be among the busiest in terms of new launches and sales, according to property analysts.

Chotika Tungsirisurp, head of research and consulting at property consultancy CBRE (Thailand), said more condos and villas are expected to be launched this year, particularly in the final quarter.

"It is the high season," she said. "With completed supply continuing to grow, we anticipate more transactions as Phuket enters a more active phase in both the primary and secondary markets."

FEWER NEW LAUNCHES

According to CBRE, new launches of both condos and villas in the first half of 2025 fell by 25.3% and 41.5% year-on-year, to 3,711 and 397 units, respectively.

"Despite the decline, the volume remained healthy," Ms Chotika said. "The slowdown follows a record year in 2024 for both launches and sales, meaning the drop was not unexpected, and current figures remain well above historical averages."

The 3,711 newly launched condo units from 17 projects were concentrated in the south and southwest coastal areas, where greater land availability and lower prices made units 15-20% cheaper than those on the central west coast.

The villa market faced mounting competition from consecutive waves of new supply, leading to the dip in new launches, noted CBRE.

The northwest coast recorded the highest number of new villas during the period, as land prices there remained more attractive, following significant increases on the central west coast, particularly around Bang Tao and Cherng Talay.

This trend underscores the area's emergence as a development hub, with most projects targeting the mid-range segment with units priced between 15-35 million baht, said the consultancy.

STRONG CONDOS SALES

Condo sales recorded year-on-year growth, with 3,633 units sold in the first half, up 21% thanks to foreign buyers, who cited their affordability, said Prakaipeth Meechosarn, head of Phuket property sales at CBRE (Thailand).

"Entry-level condos can be acquired for less than 3 million baht per unit, while the entry point for villas is significantly higher and ownership structures are less attractive," said Ms Prakaipeth.

SET-listed developer Sansiri was among the top performers, posting 1 billion baht in presales from Phuket, mainly from condos, in the first half of 2025.

"The decline in foreign tourist arrivals has affected condo sales since late last year, but foreign buyer demand in Phuket remained stronger than in Bangkok, as international visitors continue to prioritise Phuket," said Uthai Uthaisangsuk, president of Sansiri.

"We expect the high season from October to March to increase sales."

VILLA SLOWDOWN

With much of the demand from both Thai and foreign buyers already absorbed, villa sales in the first half of 2025 fell 21.9% year-on-year. The typical off-season slowdown also contributed, according to CBRE.

"Although villa sales were lower than condos, this is expected: villas have higher prices and longer buyer decision cycles, with a greater share of end users," said Ms Chotika.

Developers generally limit speculative villa construction and typically begin building only after reservations and payments are secured, she said.

Despite the first-half decline, more listed developers from Bangkok have entered the Phuket market, including Land & Houses, Ananda Development and AssetWise, which recently launched its first villa project.

"These developers have attracted Thai buyers, both for second homes and investment in established resort locations. They also pay close attention to foreign buyers' requirements," said Ms Prakaipeth.

As the market matures and becomes more competitive, developers are adjusting project designs to provide better value.

"Well-known developers continue to achieve strong sales, while less experienced players face greater challenges. Projects offering a good balance of quality, location and price remain competitive," she said.

Ms Prakaipeth said previously launched villa projects not meeting sales targets may undergo revisions, reducing unit sizes for more competitive pricing or converting to condo projects.

CHINESE YET TO RETURN

She said the main buyer nationalities have remained consistent over the years, with Russians, Thais and Europeans leading activity. The market attracts a broad range of buyers.

"Phuket has become increasingly attractive as a second-home and retirement destination," said Ms Prakaipeth.

"The area also draws longer-stay visitors and expats who can work remotely."

This trend has brought in investment buyers, particularly Thais, as well as buyers seeking properties for flexible use and potential rental income.

Some investors are attracted by prospects of strong returns and long-term capital gains, she said.

However, Chinese buyers have yet to return to pre-pandemic levels.

"The revival of the Chinese tourist market is a key prerequisite for a rebound in Chinese property purchases," said Ms Chotika.

In the first half of 2025, Chinese arrivals to Thailand fell by 31.2% year-on-year, while total foreign arrivals declined 4.7% to 16.7 million, down from 17.5 million.

Despite this, Phuket airport recorded 2.76 million passenger arrivals, up 5.6% year-on-year.

"It is difficult to predict when Chinese tourists will return to anywhere near previous levels," she said.