Phuket and Samui Evolve into Global Property Investment Hubs as Foreign Buyers Shift Market Dynamics
Israeli investors embrace long-term leaseholds on Samui as villa supply outpaces Phuket, prompting calls for tighter regulation and property tax reform
- Phuket and Koh Samui are transitioning from tourist destinations into global real estate investment hubs, driven by new international buyer demographics.
- The market is being reshaped by foreign investors, with Russian buyers remaining dominant in Phuket while Israeli investors are a fast-growing force in Koh Samui.
- A significant market shift is Koh Samui's historic surge in villa construction, with its development pace now surpassing that of Phuket.
- Investors are favoring long-term leasehold agreements to build and sublease properties, attracted by high annual returns of 8-10%, which is prompting calls for regulatory and tax reform.
Israeli investors embrace long-term leaseholds on Samui as villa supply outpaces Phuket, prompting calls for tighter regulation and property tax reform.
Thailand’s premier resort islands of Phuket and Koh Samui are rapidly transitioning from traditional holiday destinations into major global real estate investment hubs, driven by evolving international buyer demographics and expanding private investment networks.
While Russian buyers maintain their dominant market position in Phuket, Israeli investors are emerging as a fast-growing influence on Koh Samui and nearby Koh Phangan, according to Krungthep Turakij reporter Bussakorn Phoosae.
Prapaporn Boonkhachornkul, deputy managing director at Savills (Thailand) Limited, noted that Phuket and Samui are now competing directly as property investment arenas attracting international capital.
In Phuket, Russian buyers remain the primary client segment, with market analysts expecting their prominence to persist for at least another three years as condominium units purchased in recent years undergo ownership transfers through 2026 and beyond.
Concurrently, Koh Samui is experiencing a historic surge in residential supply. In the first half of 2026 alone, the island saw the launch of over 800 villa units across 70 to 80 projects.
This development pace surpassed Phuket, which recorded 40 to 50 new villa projects totalling around 700 units over the same period—a supply shift unseen in decades. Annual villa demand in Phuket typically averages under 1,000 units, yet international demand across both islands is projected to remain strong for the next three to five years.
Leasehold Ecosystems and Investment Yields
Following the post-pandemic recovery, Israeli visitor arrivals to Samui rose from 70,000 to more than 200,000, laying the groundwork for increased residential demand.
Prime locations including Mae Nam, Bophut, Choeng Mon, and Koh Phangan have seen growing clusters of residential and commercial activity.
To navigate development costs, many international investors favour legal long-term leasehold agreements spanning 10 to 30 years rather than direct freehold purchases.
Capitalising on relatively lower land prices in Samui compared to Phuket, investors build boutique villa developments of 10 to 25 units, which are subsequently subleased within their private networks. This approach creates an integrated ecosystem encompassing property development, management, and tenant sourcing.
Investment returns remain a primary driver. During peak tourist seasons, mid- to high-end villas can generate monthly rental incomes of several hundred thousand baht, while legally structured condominium rentals yield tens of thousands of baht per month.
Developers estimate overall annual returns between 8 and 10 per cent, outperforming property yields in many Western markets.
Regulatory Challenges and Tax Proposals
The influx of foreign capital continues to stimulate local construction, employment, and service sectors. However, industry observers have raised questions regarding regulatory oversight and capital tracking, particularly where transactions involve digital payment systems or assets.
Concerns have also been highlighted regarding the use of foreign labour and imported building materials, which can reduce the local economic multiplier effect, as well as the potential use of Thai nominee shareholders to circumvent land ownership laws—a practice state authorities are mandated to investigate under Thai law.
In response to these market shifts, proposals are gaining traction to review tax structures for foreign property buyers. Analysts point to international models such as Singapore's Additional Buyer's Stamp Duty (ABSD), suggesting that Thailand could consider tiered taxation for foreign buyers holding multiple properties to generate state revenue and maintain domestic housing stability while preserving the nation's investment competitiveness.
