For Phuket property buyers and sellers, the latest Thailand-wide transfer data offers a clear lesson: the market is moving in two directions at once, and the split is becoming sharper.
Residential transfers across Thailand rose 11.2% year-on-year in the first quarter of 2025, according to the Real Estate Information Center (REIC). But the growth was entirely concentrated in homes priced below 7.5 million baht—the segment that qualifies for government tax incentives. Above that threshold, demand fell off a cliff.
Units priced between 7.51 million and 10 million baht dropped 17.4%. Homes above 10 million baht fell 13.2%.
Narongpol Prapanirin, acting director of REIC, explained the dynamic plainly: transfer volumes rose by 11.2%, but transfer value increased by only 3.1%. That disconnect means the market is tilting heavily toward lower-priced transactions.
What drove the growth
The government reduced transfer and mortgage fees to 0.01% for homes priced under 7 million baht, a move designed to stimulate domestic demand. It worked—but only within the targeted price band.
Homes under 1 million baht rose 16.1% year-on-year to 19,665 units. Units priced between 2.01 and 3 million baht increased 15.3% to 15,284 units, with transfer value up 15.5% to 38.4 billion baht. This was the strongest performing segment.
Overall, all price brackets below 7.5 million baht posted growth of 12.7%.
Above that line, the story reversed. Buyers either lacked the purchasing power or chose to wait. The luxury segment, which typically includes higher-end condos, pool villas and foreign-targeted product, weakened noticeably.
Why this matters for Phuket property
Phuket’s real estate market has always skewed higher than the national average. Villas in Laguna, Kamala, Surin and the southern coastal areas often start above 10 million baht, and many exceed 20 million. Foreign buyers, expats and affluent Thai buyers—the groups driving Phuket sales—typically sit well outside the price range benefiting from government incentives.
The Q1 data suggests that domestic buyers at the budget end are responding to tax relief and price adjustments, but higher-end demand is cooling. For sellers and developers in Phuket, the implication is straightforward: the tools that worked to lift the national numbers are not reaching the luxury segment.
REIC noted that housing prices, unit sizes and product types are being adjusted to match buyer purchasing power. That shift is happening fastest in Bangkok and upcountry markets where affordability is more flexible. In Phuket, where foreign demand and lifestyle buyers dominate, the adjustment path is different—and likely slower.
What the centre expects next
REIC projected that residential transfers nationwide will decline 1.1% for the full year, with transfer value falling 2.3%. The forecast reflects external pressure from Middle East tensions, rising energy and construction costs, and persistent inflation affecting household purchasing power.
The centre expects the slowdown to remain limited, supported by the one-year extension of eased loan-to-value ratios, continued transfer fee reductions for homes under 7 million baht, and the government’s 400-billion-baht stimulus package.
But stimulus aimed at the mass market does not necessarily translate to luxury demand. Phuket’s market is shaped more by foreign buyer confidence, currency movements, long-stay visa policy, rental income expectations and access than by domestic tax relief.
The detail buyers should watch
The Q1 figures confirm what many Phuket agents already know: demand is stratified. Budget buyers are moving when incentivised. Luxury buyers are more cautious, selective and slower to commit.
For buyers, this suggests stronger negotiating position in the higher price brackets. For sellers, especially of villas or high-end condos, it points to the need for sharper pricing, clearer positioning and realistic timelines.
The wider question is whether foreign demand—historically a stabilising force for Phuket’s upper-end market—will strengthen later in the year. That will depend on factors the Q1 data does not capture: visa policy, international tourism recovery, rental yield visibility and currency stability.
Frequently Asked Questions
What caused the increase in Thai property transfers in Q1?
The 11.2% rise in transfers was driven by government tax incentives that reduced transfer and mortgage fees to 0.01% for homes priced under 7 million baht. All price segments below 7.5 million baht posted growth, while units above that threshold declined sharply.
Why did luxury property transfers fall in Thailand?
Units priced between 7.51 and 10 million baht fell 17.4%, and homes above 10 million baht dropped 13.2%. The tax incentives did not apply to these price brackets, and buyers in this segment appear to be more cautious amid rising costs and external economic pressure.
Does the Q1 data apply to Phuket’s property market?
The national data reflects broader trends, but Phuket’s market is skewed toward higher prices and foreign buyers. The luxury segment weakness shown in Q1 is relevant to Phuket, but local demand dynamics—tourism, long-stay buyers, rental income—differ from upcountry markets.
What is REIC forecasting for the rest of the year?
REIC expects residential transfers nationwide to decline 1.1% for the full year, with transfer value falling 2.3%. The slowdown is expected to remain limited, supported by extended loan-to-value relief, continued fee reductions and the government’s 400-billion-baht stimulus package.
What should Phuket property buyers and sellers take from this?
Buyers in the luxury segment may find stronger negotiating position as demand softens. Sellers should be realistic about pricing and timelines. The national incentives are not reaching the higher-end market, which means Phuket’s recovery will depend more on foreign buyer confidence and tourism demand than on domestic stimulus.
Sources
- Bangkok Post — Residential transfers up 11.2% in Q1 — link
