Thailand's two largest islands emerge as real estate hubs fueled by Russian, Israeli investment

Thailand's Phuket and Samui islands are emerging as prime real estate destinations, attracting international investment from Russia, Israel, and beyond. Savills Thailand's deputy managing director, Prapaporn Boonkhachornkul, notes that these islands are now competing directly with each other for property investment. Russian buyers continue to dominate the Phuket market, with their dominance expected to last at least another three years as they purchase condominium units and resell them through 2026 and beyond.

Meanwhile, Samui is experiencing a significant expansion in residential supply, with over 800 villa units launched across 70 to 80 projects in the first half of 2026 alone. Israeli investors are increasingly influential in Samui and the neighboring island of Koh Phangan. The increase in villa development in Samui has outpaced that of Phuket, with 40 to 50 new villa projects totaling around 700 units introduced in the first half of 2026.

Annual villa demand in Phuket typically remains just below 1,000 units, but international demand is expected to stay strong over the next three to five years. Foreign investors prefer long-term leasehold agreements, allowing them to develop boutique villa projects with 10 to 25 units before subleasing them. These projects generate strong returns, with mid- to high-end villas earning several hundred thousand baht in monthly rental income.

The influx of foreign capital has boosted Thailand's construction, employment, and service sectors, but concerns have been raised about regulatory oversight and capital monitoring, especially in transactions involving digital payments and imported materials. To address these concerns, proposals are being made to review tax policies for foreign property buyers, potentially adopting a tiered system to boost state revenue and support domestic housing stability.