"Property values on the island are rising mainly because Phangan has become a global hub for digital nomads. Combined with the post-COVID tourism recovery, strong foreign investment, and limited supply of land and completed homes, this creates a powerful driver for growth," Michael Skiba, co-owner of the development company Koh Phangan Estate, commented.
Phangan offers attractive investment opportunities, characterized by high rental demand and a potential for annual net yields often exceeding 10% for villas(1). The historical relative affordability compared to established luxury markets like Phuket and Samui initially drove investor interest, though prices are now rapidly approaching the levels of those markets(3).
The reopening of international borders in early 2022 after the COVID-19 pandemic served as a tipping point, sparking a pronounced "property boom" as international investors, including those from Bangkok, actively entered the market(3).
This accelerated growth can be attributed to its "emerging" status, its previous relative undervaluation compared to more established islands, and the specific, highly sought-after niche (digital nomads, certain foreign buyer groups) it has successfully cultivated. This niche demand is less diluted than in larger, mature markets. For investors seeking higher capital appreciation potential, Phangan may represent a more dynamic opportunity than the broader Thailand market or even other islands that have already reached a higher level of maturity and valuation.
Government initiatives, such as the offering of visa-free travel, further incentivize these foreign transactions and contribute to market activity(6) The ongoing tourism recovery, evidenced by a surge in tourist arrivals across Thailand(15), directly fuels demand for both short-term vacation rentals and long-term second homes, thereby solidifying the investment appeal of residential properties on the island.
"Government policies that simplify entry and investment for foreigners — like visa waivers or digital nomad programs — immediately boost demand, whether it’s for tourist rentals, long-term homes, or second residences for remote workers," Michael Skiba, co-owner of the development company Koh Phangan Estate, commented.
This dynamic could make the Phangan market potentially more resilient to domestic economic headwinds, as it relies on external capital. However, it also makes the market more sensitive to global capital flows and the economic health and confidence of key foreign buyer groups.
Limited supply is a defining feature of island real estate. With little room for expansion, demand quickly outpaces available land and properties, creating a "scarcity premium". This makes Phangan’s market more resilient to downturns and explains why land appreciates faster than built homes — it is the finite resource driving competition.
Notably, over half of the island is protected under Than Sadet–Ko Pha‑ngan National Park, which covers about 66 km² of the island’s 125 km² area. This conservation zone bans construction and significantly limits developable land, reinforcing scarcity and the island’s appeal for investors seeking long‑term capital appreciation.
This comparative analysis suggests that Phangan presents an attractive opportunity for investors seeking higher growth potential in an "emerging luxury" segment. It offers the prospect of significant capital appreciation as its trajectory towards greater maturity continues. In contrast, Phuket and Samui, having already reached higher valuation plateaus, may offer more stable but potentially lower future growth rates. The choice of island for investment would thus depend on an investor’s specific risk appetite, desired growth profile, and long-term strategic goals.