Thailand's two largest islands, Phuket and Koh Samui, are both world-renowned tropical getaways and highly sought-after destinations for discerning international property investors. Both islands feature stunning landscapes, with incredible beaches, awe-inspiring ocean views, plus robust and growing real estate markets. However, when comparing these islands side by side, each offers distinct advantages and considerations in terms of lifestyle and property market characteristics. Based on many years of firsthand experience marketing properties in Thailand’s resort destinations, we have compiled this concise guide to property for sale in Koh Samui and Phuket. With a focus on the luxury sector, this article serves to help you decide which island best aligns with your investment and lifestyle goals.
The Role of Tourism in the Property Market
For all of Thailand’s resort markets, the key driver of real estate performance is tourism. Buyers often first encounter these destinations during vacations and later decide to invest in a holiday home or lifestyle property. Destinations like Phuket and Koh Samui are cash-based markets for overseas buyers due to Thai restrictions on foreign nationals obtaining mortgages. This lack of leverage adds a layer of security, insulating these property markets from many global economic challenges, such as fluctuating interest rates and tightening lending criteria. R
Moreover, foreigners who can afford to purchase a second home overseas typically belong to higher-wealth segments of society. This is particularly true in the luxury property market, where buyers are predominantly high-net-worth individuals. Consequently, there is sustained demand for luxury properties in Phuket and Koh Samui, even during periods of economic downturn.
The resilience of these markets was particularly evident in their recovery from the global pandemic. The property markets of both islands rebounded remarkably strongly as tourism surged back. Thailand’s Sandbox program, which allowed fully vaccinated travellers to visit during global lockdowns, played a significant role in this rapid recovery.
Infrastructure and Accessibility
Phuket stands out for its advanced infrastructure and international connectivity. Its international airport offers direct flights to major hubs across Europe, Asia, and Australia, making it a convenient destination for global buyers. The Sarasin Bridge also connects Phuket to the mainland, facilitating travel by road. With well-developed amenities, including international schools, hospitals, and shopping centres, Phuket is particularly attractive for families and long-term residents.
Koh Samui, while less developed, has made significant strides in improving its infrastructure. Its international airport offers flights to Bangkok, Hong Kong, and Singapore, though its connectivity is more limited compared to Phuket. The island’s smaller scale and quieter atmosphere appeal to buyers seeking a laid-back lifestyle, but amenities remain more modest in scope.
Property Prices and Value for Money
At the entry level, property prices in Koh Samui and Phuket are relatively similar, with small condos starting at around 2-3 million THB and entry-level villas from 4 million THB. However, in the luxury segment, the differences become more pronounced. Koh Samui’s top-end villas are typically priced at a maximum of 6-8 million USD, while Phuket’s super-luxury estates can command prices of 20-25 million USD. On a price-per-square-metre basis, particularly in the mid to luxury price range, Phuket is generally more expensive, reflecting its mature market and higher land costs.
A key distinction lies in the availability of freehold condominiums. Phuket offers a wide range of freehold condos, including luxury developments with branded residences. These properties provide integrated resort services and appeal to buyers seeking both lifestyle and investment benefits. In contrast, Koh Samui has limited freehold condo options, with very few offerings in the luxury sector. Koh Samui’s property market has always been dominated by villas and houses, with only a handful of apartments and condominium projects.
Lifestyle and Atmosphere
Koh Samui and Phuket cater to different lifestyle preferences. Koh Samui, though now quite developed, still Koh Samui and Phuket cater to different lifestyle preferences. While Koh Samui has become quite developed, it still retains a relaxed island vibe, making it an ideal choice for retirees or those looking to escape the hustle and bustle of urban life. The island’s natural beauty, from pristine beaches to lush hillsides, continues to be a major draw for buyers seeking tranquillity.
Phuket, on the other hand, provides a vibrant, urbanised island experience. It combines natural beauty with extensive amenities, entertainment options, and a dynamic social scene. The island’s larger size and more developed infrastructure make it suitable for families and professionals seeking convenience without sacrificing tropical charm.
Investment Potential
Koh Samui’s less developed market offers opportunities for capital gains, particularly in early-stage projects. However, investors should exercise caution, as many developments are initiated by first-time or underfunded developers. By contrast, when looking at property for sale in Phuket, market generally provides a safer investment environment due to a higher proportion of experienced and reputable developers. The island also offers an excellent selection of branded real estate, which adds an element of security due to the brand reputations at stake. Higher property prices in Phuket are justified by its mature property market, superior infrastructure, and extensive amenities.
Both markets also deliver excellent rental yields, driven by their thriving tourism sectors. As with any overseas property investment, thorough due diligence is essential to mitigate risks and ensure project viability.
Beaches and Natural Beauty
Both islands are renowned for their stunning beaches; Koh Samui is known for its calm, clear waters and soft white sand, with Chaweng Beach being a standout destination. The island’s smaller scale and serene vibe add to its charm.
Phuket offers greater diversity, with 65 beaches ranging from lively hubs like Patong Beach to secluded coves ideal for privacy. The variety of landscapes ensures that buyers can find the perfect setting to match their preferences, whether it’s a bustling beachside scene or a tranquil escape.
Property Ownership Structures
Foreign ownership of land in Thailand is restricted by law. While condominiums can be owned freehold in perpetuity by foreigners, with the title deed registered directly in the investor’s name, villas and houses with land require alternative ownership structures.
For freehold villas, where ownership of the land is included in the purchase, the only option for foreigners is to acquire the property through a corporate holding structure. This involves setting up a Thai limited company, in which Thai nationals must hold at least 51% of the shares. The foreign buyer typically serves as the controlling director of the company. The company must operate as a genuine business generating income, not solely as a holding vehicle for the land, and it must file annual financial statements and meet reporting requirements. Thai shareholders must not be nominees; they need a legitimate interest in the company and must be compensated through dividends. Although the costs of setting up and maintaining such a structure are significant, they are financially viable within the luxury property sector.
Alternatively, leasehold ownership structures allow foreigners to secure a 30-year lease on land, with contractual agreements for renewal. While renewable leases may provide a potential long-term solution, renewals are at best a grey area under Thai law, making this option less secure. Branded developments often provide greater assurances for lease renewal due to the long-term reputations of the businesses being on the line.
For any property acquisition transaction, especially when investing in less familiar overseas markets, conducting thorough due diligence is essential. Working with experienced agents and legal advisors helps buyers navigate the complexities of ownership structures and realise their investment goals.
Key Takeaways
Choosing between Koh Samui and Phuket ultimately depends on your personal preferences and investment priorities. Koh Samui offers a quieter, more relaxed environment with strong potential for capital gains in its less developed market. Phuket, with its superior infrastructure, diverse property options, and mature market, appeals to those seeking a more urbanised island lifestyle. Both destinations present unique opportunities for discerning buyers in Thailand’s luxury property market.
