Real Estate Pricing
It is almost a misnomer to refer to “The Phuket Real Estate Market” because it is not a homogeneous entity. It is divided (and even subdivided) into categories which collectively include a diverse array of buyers. This section aims to address some of the fundamentals which impact the cost of property in Phuket, with an emphasis on the prices being paid by foreigners.
The national statistics suggest that while the Thai property market has slowed slightly over the last two years, it made steady gains over the 10 years up until January 2016. The house price index stumbled until mid-way through 2017, then continued rising into the fourth quarter of 2018. At the time of writing, it is slightly off its recent highs.
Since the beginning of 2008, Thailand’s house price index is up 52.73%. (The impact of the current pullback has been only – 0.29%.) In simple terms, this represents a 4.79% rise in prices per year. If you are an investor who looks at capital appreciation in terms of a compound annual rate of return, it is a CARR of 3.87%.
THAILAND’S HOUSE PRICE INDEX
Before going further, it is important to distinguish between the Phuket property market, and the market in Thailand as a whole (even in Bangkok specifically). Bangkok is the capital city of Thailand, and also the major population centre for the country. With a total population of over 16 million, Greater Bangkok is home to nearly one quarter of the total population of Thailand. Because there are more people concentrated there than anywhere else in the country, the property market tends to move with the economy.