The value of residential units in Phuket leased long-term by the top 10 foreign nationalities almost tripled to 12.8 billion baht in 2023, mainly driven by Russian buyers fleeing the conflict in Europe as the foreign quota for condos was filled in many areas of the island.

Phattanan Phisutvimol, a former president of the Phuket Real Estate Association, said residential demand in Phuket among foreigners has been overwhelming since 2022 and reached a peak last year, thanks to the revival of the tourism market.

"The hottest segment is luxury, with units priced 10 million baht and higher," he said.

"In addition to villas, which foreigners need to purchase through a leasehold contract, many condo projects reached the maximum foreign quota, requiring foreigners to opt for leaseholds."

According to the Real Estate Information Center (REIC), the number of residential units in Phuket leased long-term, typically from three to a maximum of 30 years, tallied 985 units worth 12.8 billion baht last year, growing 54% and 180%, respectively, from 638 units worth 4.57 billion baht in 2022.

The skyrocketing growth in value was a continuation from 2022, when it tripled from 1.45 billion baht from 322 units in 2021. The segment was valued at 1.5 billion baht from 311 units in 2020.

Russians dominated among foreign nationalities opting for a leasehold property in 2023, both in terms of units and value, accounting for 53% and 44% respectively.

Last year, the value of leasehold properties purchased by Russians surged to 6 billion baht from 2.52 billion in 2022, while the number of units rose by just 32% to 591 units from 447 units.

This indicated Russians bought more higher-priced units, including "super-luxury" villas, according to REIC.

Among the top 10 nationalities purchasing residential units in Phuket under a leasehold contract, Israelis were 10th last year and ninth in 2022 in terms of unit numbers.

Singaporeans were among the top five nationalities in terms of value the past two years, though they did not make the top 10 prior to that. The value of their leasehold purchases jumped from 230 million baht to 1.64 billion baht last year, representing the largest gain among the top 10.

Chinese were No.2 in terms of number of units purchased, surging from 21 units in 2022 to 245 units in 2023, while the value rose by 4.6 times to 2.57 billion baht from 550 million baht.

"Chinese prefer freehold property ownership rather than leasehold. Their increase in leasehold properties last year was attributed to a lack of available condos, as foreign quotas were filled," Mr Phattanan said.

He said the boom in tourism in Phuket not only benefits foreign demand for property there, but also those working in the hospitality sector, as Phuket is likely the only province where potential homebuyers of units priced 3 million baht or less recorded a low rejection rate.