Villa Papillon, with views of Surin Beach and the iconic Amanpuri Resort, is on the market for US$14.29 million (Photo: List Sotheby’s International Realty Thailand)
Thailand’s crackdown on nominee ownership structures is prompting foreign buyers in Phuket and Koh Samui — Thailand’s most popular resort-property markets — to reassess how they purchase villas.
Since Jan 1, Thai authorities have stepped up enforcement against Thai nominee ownership structures used by foreigners to hold land or operate businesses.
New measures introduced on April 1 further tightened oversight of Thai nominee-controlled businesses and land-holding structures. There were also recent news reports about raids on villas, businesses and even a lawyer’s office.
Read also: Retail-led developer Central Pattana to pump billions into large mixed-use projects across Thailand
Foreigners cannot own land in their own name in Thailand. They are restricted to buying leasehold rights to a landed property. However, foreigners can purchase freehold condo units outright, although under the Thai Condominium Act, foreign ownership is capped at 49% of the total floor area in a condo development.
“Still, many people harbour the dream of owning a resort property in Thailand — a pool villa or a hillside retreat with sea views,” says Felix Desjardins, head of acquisitions for Phuket and Koh Samui at List Sotheby’s International Realty Thailand.
The immediate impact has been a slower decision-making process. “Some foreign buyers are taking their time to understand the available options before purchasing a property,” says the Phuket-based Desjardins.
However, the measures have not dampened demand. “People tend to buy into Thailand first and the asset second,” Desjardins says. “Once they have spent enough time in the country and become comfortable with the lifestyle, they are often able to get over that hurdle [of a leasehold structure].”
Felix Desjardins: People tend to buy into Thailand first and the asset second. Once they have spent enough time in the country and become comfortable with the lifestyle, they are often able to get over that hurdle [of a leasehold structure]. (Photo: List Sotheby’s International Realty Thailand)
As a result, leasehold structures have emerged as the preferred route for foreigners seeking villa ownership. These are typically structured around an initial 30-year lease, with contractual renewal rights to extend the lease to 90 years in total.
Typically, the land is held by a company, while villa owners are granted long-term leasehold interests. In some developments, owners also hold shares in the land-holding company and are given voting rights, allowing them to collectively support lease renewals.
Read also: Thai hospitality operators position country as safe haven amid global tensions
“Many people now refer to these as ‘protected leasehold structures’,” says Desjardins. “They are not, as is sometimes believed, simple leases that gradually decline to zero and become worthless.”
That said, not all leasehold structures are created equal, he emphasises. “The details matter, and buyers should work with experienced legal counsel who can properly explain the protections and nuances of each structure.”
Living room of one of the villas at Pacific Palisade in the Bang Por hills on the northwestern coast of Koh Samui (Photo: List Sotheby's International Realty Thailand)
Despite heightened scrutiny and greater buyer caution, Desjardins remains bullish about Phuket and Koh Samui over the long term. “They continue to stand out as two of Southeast Asia’s premier resort and lifestyle destinations, and I don’t see any obvious competitors challenging that position over the coming decade,” he says.
While international buyer interest continues to grow, Desjardins likens it to a steady trickle rather than a flood. Even the recent conflict involving the US and Iran has led only to a gradual increase in enquiries from UAE-based buyers rather than a sudden surge in transactions. “These are long-term decisions that typically take time to materialise,” he says.
At the start of the conflict, a handful of families from the UAE had temporarily relocated to Phuket and Koh Samui, with their children attending school remotely. “It’s similar to what we saw during Covid,” he says. However, that trend lasted only a few months, and some of those families have since returned to the UAE.
Market shifts in Phuket and Koh Samui also tend to be more gradual than in Singapore or Hong Kong. “Phuket and Koh Samui are primarily second-home markets, which are less liquid and see lower transaction volumes,” adds Desjardins.
Read also: Capstone Asset to debut Asia Pacfic’s first Autograph Collection Residences with Peylaa Phuket
Nevertheless, Desjardins has observed growing interest from Singapore-based professionals, particularly fund managers and others in the financial sector. Since the pandemic, many have prioritised flexibility, wellness, access to nature and a better quality of life.
Outdoor pavilion to enjoy sea views from the hillside villa at Pacific Palisade (Photo: List Sotheby's International Realty Thailand)
“These buyers want a second home in a relaxed environment with a resort lifestyle,” he says. “A de facto choice is Thailand. They can go to their Singapore office one week a month and spend the rest of their time at their villa with a view.”
Phuket and Koh Samui attract different buyer profiles. “In Koh Samui, there’s quite a large contingent of Europeans, particularly French buyers, as well as Singaporeans and other regional purchasers,” says Desjardins.
Phuket, by contrast, attracts a more diverse mix of buyers from the Middle East, India, mainland China, Europe, the US and Southeast Asia. “It’s a real melting pot,” he notes.
The broader international buyer base is also reflected in Phuket’s pricing spectrum.
At the top end of the market, Phuket villas can command US$25 million ($32 million) to US$30 million, particularly those on the hillside with sea views.
In Koh Samui, the market tops out at about US$5 million–US$6 million, he estimates. However, there are exceptions. One example is the Four Seasons Resort Koh Samui, which served as the primary filming location for the fictional The White Lotus resort in Season 3 of the eponymous HBO series. Three new villas are being developed within the resort, with price tags starting from US$12 million each.
Villa Maraya, one of the luxury villas at Cape Yamu, an exclusive private peninsula on the eastern coast of Phuket (Photo: List Sotheby’s International Realty Thailand)
The fundamentals underpinning Phuket’s property market remain strong. Between January and April, Phuket recorded 4.9 million visitors, of which 3.5 million were international arrivals and over 1.3 million were domestic tourists. Average hotel occupancy stood at 81.85%, according to the Tourism Authority of Thailand.
Russia, China and India were the island’s three largest source markets, followed by the UK, France, Germany, Australia, Kazakhstan, South Korea and Malaysia.
Going by the latest residential market survey by the Thai Real Estate Research and Valuation Information Centre, Phuket is Thailand’s second-largest real estate market after Greater Bangkok.
Much of the supply in Phuket is concentrated in the condo segment. Holiday condos account for 38,613 units and are valued at a combined THB321.036 billion ($12.56 billion).
The scale of development is particularly evident in the wider Bang Tao-Layan area, on the island’s western coast, where more than 80 projects are at various stages of launch, construction or completion.
One of the private villas at Katamanda Estate in south-west Phuket, and within walking distance from Kata and Kata Noi beaches (Photo: List Sotheby's International Realty Thailand)
“If you drive through the area today, you’ll see construction sites, cranes and advertisements for off-plan villas almost everywhere,” says Desjardins. “The level of activity is striking and reflects just how much new supply has entered the market in recent years.”
While villas account for only 7% of Phuket’s total residential stock by unit count, they represent 31% of the market’s value. The villa segment comprises 6,563 units, valued at THB207.568 billion in total. Of these, 3,949 units have been sold, leaving 2,614 available.
For Desjardins, that imbalance highlights the attractiveness of the villa segment, particularly in the resale market and among projects by established developers with proven track records.
New supply at the luxury end of the Phuket market is becoming increasingly scarce, in particular new stock in the US$4 million–US$8 million range. “If you have something renovated, and at this price point, it’s going to stand out,” he says.
One of the Boho style, tropical villas at Pacific Palisade in the Bang Por hills on the northwestern coast of Koh Samui (Photo: List Sotheby's International Realty Thailand)
Having spent nearly 15 years in Thailand’s luxury property market — including the last four at List Sotheby’s International Realty Thailand and more than a decade advising a Thai-based family office — Desjardins says that one of the structural features of Thailand’s luxury property market is its lack of pricing transparency.
“Transactions are largely private,” he says. Consequently, many properties are mispriced. “There are deals that are done at the asking price, and others that are overpriced by multiple millions,” he adds. “You need to be a real insider who is actively transacting in the market to understand what prices properties are actually changing hands at.”
Established luxury residential estates in Phuket, such as Amanpuri, Trisara and Cape Yamu, have transaction histories that can serve as useful valuation benchmarks. Even then, much of the pricing intelligence is gathered informally, “over coffees and dinners”, he says.
Pricing opacity at the top end of the market is further complicated by the rising costs of fuel and construction materials due to the war in the Middle East. Some developers have reported a 20% increase in prices quoted by their contractors, compared to pre-war prices. For projects under construction, the developers have no choice but to absorb part of the additional costs, says Desjardins.
However, in future phases of existing and new developments, some of these increases may be passed on to buyers through higher asking prices. “The industry is still assessing the long-term impact,” he adds.
A custom-built luxury villa in Kaya – The Estates @ Bophut Hills, sitting on a site of over 20,000 sq ft, was purchased off-plan for US$700,000. The new customised residence, Sora, will feature more than five bedrooms across 22,000 sq ft of built-up area, and cost around US$2.7 million to construct. (Photo: List Sotheby’s International Realty Thailand)
Recent transactions brokered by Desjardins illustrate the diversity of demand across Thailand’s luxury villa market, ranging from custom-built residences to turnkey investment properties.
One of the more interesting deals that Desjardins brokered recently was for a custom-built luxury villa in Koh Samui, purchased off-plan. The buyer selected the land parcel first and is now working directly with the architect to create a fully customised residence.
The property sits on a land area of over 20,000 sq ft in Kaya the Estates @ Bophut Hills, which the owner purchased for US$700,000. The customised residence, named Sora, will feature more than five bedrooms across 22,000 sq ft of built-up area.
Construction costs — still being evaluated — are estimated at around US$2.7 million.
"For many buyers, the ability to shape the final product themselves is a major attraction, particularly in the luxury market,” notes Desjardins.
A villa at Anchan Burgundy, a boutique residential development in the Thalang district of Phuket (Photo: List Sotheby’s International Realty Thailand)
Another transaction he handled involved a villa at Anchan Burgundy, a boutique residential development in Phuket.
Anchan is one of Thailand’s most established villa developers, with multiple phases of the same luxury villa concept, including Anchan Emerald, Anchan Indigo, Anchan Sunscape and Anchan Mountain Breeze.
The villa sits on a land area of over 13,000 sq ft, and has four bedrooms and a built-up area of 7,535 sq ft. It was purchased for US$1.6 million, a price point Desjardins describes as the entry level of Phuket’s luxury villa market.
Pacific Sunset, a gated villa development near Four Seasons Resort Koh Samui (Photo: List Sotheby’s International Realty Thailand)
A third villa that Desjardins brokered was a hillside property at Pacific Sunset, a gated development near Four Seasons Resort Koh Samui. Pacific Sunset is developed by the same developer who built Pacific Palisade, another villa estate in Koh Samui.
Still under construction, the property reflects continued demand for contemporary sea-view homes in prime locations with strong lifestyle appeal, says Desjardins.
When completed, it will occupy a land area of over 7,500 sq ft with a built-up area of close to 7,400 sq ft. It will have five bedrooms and five bathrooms. The buyer paid US$765,000 for the villa.
Villa Sumba, which was sold off-plan for US$765,000, occupies a land area of over 7,500 sq ft with a built-up area of close to 7,400 sq ft. It will have five bedrooms and five bathrooms when completed. (Photo: List Sotheby’s International Realty Thailand)
While Desjardins remains positive on the long-term outlook for Phuket and Koh Samui, he notes that “today’s market is still one where quality, presentation and realistic pricing matter enormously”.
For buyers willing to navigate Thailand’s evolving ownership landscape, however, the appeal of a tropical second home appears undiminished.
For more news and analysis, read our weekly e-paper. Prefer a print copy? Get it delivered to your home every Monday.