Phuket property set to stay strong in 2026

Phuket's luxury residential market is expected to remain resilient this year, driven by sustained foreign demand, rising land prices and a strong appetite for branded residences, even as competition intensifies among condo developers.

According to property consultancy Knight Frank Thailand, luxury and branded residential projects in prime west coast locations are expected to continue outperforming the broader market throughout 2026.

Developments in Bang Tao, Layan, Kamala and Cherng Talay remain the most sought-after, particularly projects associated with internationally recognised hotel brands, professional rental management and integrated lifestyle facilities.

Nattha Kahapana, partner and managing director of Knight Frank Thailand, said luxury villas continue to outperform condos as affluent overseas buyers increasingly prioritise lifestyle over investment alone.

"While condos remain an important component of Phuket's residential market, villas continue to outperform, reflecting evolving buyer preferences among affluent international purchasers," he said.

Villa sales increased by 12.9% in 2025 despite softer condo demand, highlighting the growing preference for larger homes offering greater privacy and long-term value.

"Today's buyers are seeking more than a holiday home. They are looking for privacy, space, lifestyle and long-term value," Mr Nattha said.

He said Phuket's strengthening position as a global lifestyle destination is expected to support persistent demand for luxury and ultra-luxury villas in prime west coast locations over the coming years.

According to Knight Frank, competition is expected to intensify, particularly among off-plan condo projects launched during the past 3-4 years.

A large pipeline of new developments is likely to increase competition through pricing, promotional campaigns and sales incentives as developers compete for buyers.

Projects in secondary locations or those lacking clear product differentiation might face slower sales and longer absorption periods.

Buyers are becoming increasingly selective, favouring projects backed by reputable developers, internationally recognised brands and realistic rental income potential.

Land prices along Phuket's west coast are also projected to keep rising, due to limited development sites in Bang Tao, Laguna, Layan and Kamala.

The scarcity of beachfront and seaview land is expected to underpin long-term capital appreciation for both luxury condominiums and villas.

Mr Nattha said infrastructure improvements would create new growth opportunities beyond Phuket's traditional investment hotspots.

"The proposed airport in neighbouring Phangnga, together with ongoing transport infrastructure upgrades, is expected to stimulate residential development in northern Phuket and surrounding areas," he added.

Emerging destinations such as Mai Khao, Nai Yang, Thai Mueang and Natai are likely to attract greater developer interest as connectivity improves.

Foreign buyers are expected to remain the primary driver of Phuket's residential market, with demand still deriving mainly from Russia, China, Europe, India and the Middle East.

These buyers remain active across holiday homes, investment properties and long-term residential purchases, reinforcing Phuket's position as one of Asia's leading international property destinations.

Mr Nattha said the island's rental market also remains attractive, with condominiums and pool villas generating stronger rental yields than many other residential markets in Thailand.

However, rental performance remains closely tied to tourism cycles, particularly the difference between high and low seasons.

Projects relying heavily on short-term holiday rentals are likely to experience greater fluctuations in occupancy and rental income than developments targeting longer-term residents or professionally managed leasing programmes.