Phuket pushes LTR visas and legal options to nominee ownership for Chinese villa buyers

Phuket developers are promoting long-term residence visas and registered property-use rights to attract foreign residents and investors as the island’s property market cools after several years of rapid growth. 

Maetapong Upatising, president of the Phuket Real Estate Association, said weaker foreign buying had prompted developers to reassess sales strategies. Thailand’s Long-Term Resident (LTR) visa offers one way to encourage longer stays, while “Registered property-use rights” is attracting interest as a legal property arrangement for foreign villa buyers amid tighter scrutiny of nominee ownership.

Slower sales and rising supply reshape the market

Maetapong said Phuket’s property market had expanded strongly over the past two to three years, supported by recovering tourism and returning foreign investors. Housing and hotel development accelerated, with exceptionally high absorption rates, measuring how quickly available properties sold, in 2024 before momentum eased in 2025.

“Absorption rates for both condominiums and low-rise homes began to level off in the first quarter of 2026 and entered a downward trend,” Maetapong said. “The market is moving from rapid growth into a phase in which developers must pay closer attention to sales timing and supply management.”

Maetapong described the overall hotel market as broadly unchanged from the previous year, although performance varied significantly by segment. Luxury and upper-upscale hotels continued to perform well and could raise room rates, while hotels rated from two to three-and-a-half stars faced pressure and weaker results than a year earlier.

Maetapong identified growing accommodation supply as a central challenge, with new hotels and condominiums adding rooms to the market. Patong and Choeng Thale warranted particular attention because some condominium projects had obtained permission to operate as hotels, intensifying competition.

Hotel operators consequently needed to manage room pricing, service quality and market positioning as additional supply entered the market, Maetapong said.

 

Russian visitors remain central to Phuket’s property demand

Maetapong said Phuket’s economy depended heavily on tourism and related businesses, making the composition of overseas visitors important to property demand. Phuket airport data placed Russia first among international visitor markets, followed by China and India, whose shares were similar.

Maetapong contrasted Phuket’s visitor mix with the importance of Chinese tourists to Thailand’s broader tourism market.

“These differences matter for property because visitors from each market have different travel habits, purchasing power and investment preferences,” Maetapong said. “Those differences ultimately feed through into demand for housing, hotels and investment properties.”

Maetapong reported a 2% decline in overall passenger traffic but expected the fourth-quarter high season to bring volumes back close to the previous year’s level. Weaker arrivals from Russia and the United Arab Emirates had contributed to pressure during the second and third quarters, reflecting war-related disruption and restrictions on flights and travel, rather than difficulties moving money abroad.

“Phuket’s economy is closely tied to tourism. Passenger numbers are more than airport statistics; they are an important indicator of purchasing power in the property market,” Maetapong said. “If tourists return, property will benefit too.”

Developers use LTR visas to encourage longer stays

Maetapong said developers were incorporating the Board of Investment’s LTR visa programme into their sales strategies to appeal to foreigners interested in living or working in Thailand over the longer term.

Launched in 2022, the Long-Term Resident visa programme offers qualifying foreigners the opportunity to stay for up to 10 years, subject to eligibility and continued compliance with the programme’s conditions. 

“Developers have been using the programme as part of their sales strategies to encourage foreign customers who want to live or work in Thailand long term,” Maetapong said. “The figure cited early this year was 8,621 applications, mostly from Americans, who are not Phuket’s main property buyers. Nevertheless, LTR remains another tool that broadens the options available to the market.”

Maetapong stressed that slower activity did not mean purchasing power had disappeared. Buyer behaviour and investment conditions had changed since the 2024 peak, when the Russia-Ukraine war encouraged substantial foreign capital to flow into Phuket property as investors looked for somewhere to hold funds and invest.

“As that impetus fades, buyers are becoming more cautious, while developers must be more selective about locations, pricing and target customers,” Maetapong said.

Families and Thai second-home buyers support residential demand

Maetapong said residential preferences were becoming more clearly differentiated by location. Bang Tao appealed to foreigners staying for extended periods, particularly families, while Patong catered more heavily to short-stay visitors focused on holidays.

“These differences make location an important factor in project development now that the market is no longer growing at the same pace everywhere,” Maetapong said.

Maetapong also highlighted growing interest from Thai buyers, particularly Bangkok residents relocating to Phuket or purchasing second homes. Their motivations extended beyond investment to quality of life, including concerns about PM2.5 air pollution and flooding.

Maetapong said the expansion of international schools would provide further support, with the number expected to rise from 18 to 22 over the next one to two years.

“As schools, housing and services increasingly cater to foreign and Thai families, Phuket is gradually developing from a tourism destination into a place to live and invest,” Maetapong said.

Nominee scrutiny increases interest in registered property rights

Maetapong said stricter investigations into nominee property ownership had affected luxury pool villas more heavily than condominiums. Foreigners can legally own condominium units within the foreign-ownership quota, which is capped at 49% of the combined floor area of all units in a registered condominium. 

Maetapong explained that some villa ownership arrangements had historically involved Thai companies with at least 51% Thai shareholding. Certain arrangements had raised concerns about whether the Thai shareholders were genuine business participants.

“As the authorities tighten their checks, some foreign investors have become concerned and started putting more properties on the resale market,” Maetapong said.

Maetapong identified “Registered property-use rights” as an increasingly discussed alternative. The arrangement establishes registered rights to use property for a specified period of up to 30 years; it does not transfer freehold ownership of the underlying land. 

Maetapong said awareness of 'Registered property-use rights' remained limited in Phuket, particularly among Russian buyers, an important customer group. Chinese buyers appeared more receptive because they regarded the arrangement as having a clear legal framework.

“Registered property-use rights are currently more popular in Chiang Mai and Pattaya,” Maetapong said. “Phuket is beginning to use it, and adoption could increase as the market and buyers develop a better understanding.”

Resales gain importance as developers await the high season

Maetapong said Phuket’s resale market had been expanding since before the Covid-19 pandemic. Some foreign and other investors bought properties to generate rental income while planning an eventual sale for a capital gain.

Maetapong said pressure on new-property pricing and greater buyer emphasis on value were making resale properties increasingly relevant to both purchasers and investors.

Maetapong described overall market conditions during the second- and third-quarter low season as broadly steady, with hopes for renewed momentum resting on the fourth-quarter high season. A tourism recovery could support hotels, accommodation rentals, second-home purchases and investment property demand.

“Phuket may no longer be a market where every segment grows as it did at the peak,” Maetapong said. “Location, customer groups and ownership arrangements are becoming the factors that determine which businesses succeed.”

The key questions for Phuket heading into 2027 are which buyer groups will underpin a recovery and which property types will best meet the island’s changing residential and investment needs.

Source: Bangkokbiznews