Since 2021, our analysts have monitored the residential development markets of Phuket and Koh Samui. Over that period we have assessed more than 120 projects in active construction phases. One figure from our tracking data sets the context for everything below: approximately 35% of projects delivered between 2022 and 2025 ran more than six months past their original completion date. For any buyer committing funds at the off-plan stage, that statistic should be the baseline assumption, not an edge case.
To bring structure to this risk environment, we apply a seven-criterion methodology when evaluating developers. It draws on official documents, on-the-ground inspections and financial analysis, not on marketing materials. Each criterion produces either a numerical score or a warning flag. Only the aggregate of all seven scores allows us to issue a recommendation or a caution on a specific project.
Below we describe each criterion as we apply it in 2026 across the Phuket and Koh Samui markets.
Quick answer
- Delivery track record - we verify the number of completed projects and average delay in months; a delay exceeding nine months on more than one project triggers a warning flag
- Financing structure - a developer holding a formal construction loan from a Thai bank is materially safer than one relying solely on buyer deposits; based on our estimates, only around 25-30% of active Phuket developers have disclosed bank financing as of 2026
- Payment schedule - a schedule where no more than 30% of the purchase price is due before the shell structure is complete is our baseline for 'safe'; schedules demanding 50% or more within the first three months of signing are treated as a red flag
- Permits and title - the minimum document set is a valid Building Permit, an approved EIA report (required for projects above 80 units or 4,000 sq m of usable area) and a Chanote land title
- On-site inspection - we physically visit the active construction site and inspect completed buildings delivered two to three years earlier, assessing finish quality and waterproofing condition
- Contractual protections - we review penalty clauses for delay (market standard: 0.01-0.05% of contract value per day), withdrawal rights, and deposit refund conditions
- Balance sheet and legal standing - we cross-check records held by Thailand's Department of Business Development (DBD), covering registered capital, debt profile, and litigation history
Options and scenarios
Scenario A - established developer with bank financing
This profile receives the highest safety scores in our assessments. The developer has delivered at least three projects in Phuket or Koh Samui, none with a delay exceeding six months, and holds a documented construction loan from a Thai bank. Payment schedules are structured across six to ten tranches, each tied to a verified construction milestone. In 2026 our analysts identify no more than 15 to 20 developers on Phuket who fit this description. Their projects typically carry a price premium of 15-25% above the market average, but the risk of capital loss on deposited funds is, in our assessment, low.
Scenario B - mid-tier developer without bank financing
This is the most common profile in the market. The developer has completed one or two projects and funds construction from buyer deposits combined with own equity. The critical question we ask is: what pre-sale rate must be achieved before construction can be completed without interruption? Based on our estimates, the critical threshold is around 60-70% of units sold. If that level was not reached at groundbreaking, the probability of a construction pause rises significantly. For buyers in this scenario, we recommend negotiating a back-loaded payment schedule, with a larger portion due on or after completion.
Scenario C - new entrant or first project
This carries the highest risk profile. The absence of a delivery track record makes the primary verification criterion inapplicable. In these cases we apply supplementary checks: management team experience in Thai construction, quality and standing of the appointed main contractor, and confirmation that the land title is free of encumbrances. Even when these supplementary checks return positive results, we recommend that total payments made before key handover do not exceed 40% of the property value.
Comparison table
| Parameter | Established Developer (A) | Mid-tier Developer (B) | New Entrant (C) |
|---|---|---|---|
| Completed projects | 3 or more | 1-2 | None |
| Average delivery delay | Up to 6 months | 6-12 months | No data |
| Bank construction financing | Yes | Rarely | Almost never |
| Safe pre-handover payment cap | Up to 50% | Up to 40% | Up to 30-40% |
| Contractual delay penalty | 0.01-0.05%/day | 0.01%/day or absent | Typically absent |
| Price vs. market average | +15-25% | At market level | -10-20% (price-led positioning) |
| Risk rating (scale 1-5) | 1-2 (low) | 3 (moderate) | 4-5 (high) |
Risks and mistakes
Paying a reservation deposit before permits are confirmed. We encounter projects that begin sales before a Building Permit has been issued. On Phuket this is particularly common in areas around Layan, Nai Thon, and the hillside zones above Kamala, where environmental classifications (protected forest zones, slopes exceeding 35 degrees) can delay or permanently block EIA approval. No permit confirmation means no committed funds from our perspective.
Relying on renders rather than physical evidence. Buyers purchasing remotely often base their entire decision on 3D visualisations. Our methodology requires an on-site inspection of earlier completed projects - assessing finish quality, condition of plumbing and electrical systems after two to three years of use, and feedback from the building's juristic person (property manager). The gap between a render and delivered reality can be substantial.
Overlooking the developer's corporate structure. Thai developers frequently register a separate special purpose vehicle (SPV) for each project. This means that even a developer operating under a well-known brand may be executing a specific project through a company with minimal registered capital. We verify in the DBD whether the SPV's capital is proportionate to the project scale. Based on our estimates, an SPV capitalised at less than 10-15% of total project value is a risk factor.
Underestimating the absence of buyer deposit protection. In Thailand there is no mechanism equivalent to a protected client account for foreign property buyers. Payments transfer directly to the developer. The practical protections available to a buyer are: a milestone-linked payment schedule, contractual delay penalties, and the developer's own financial soundness. This is why balance sheet analysis is non-negotiable in our process.
Skipping land title due diligence. On Koh Samui, particularly in the Maenam and Bophut areas, we encounter plots held under lesser title documents (Sor Kor 1 or Nor Sor 3 rather than a full Chanote). A project built on land without a Chanote title carries a material risk of ownership disputes. We verify title status with the local Land Office before issuing any recommendation.
Currency exposure across the construction period. Over 2024-2026 the Thai baht has traded in a relatively stable range, but a 5-8% shift over an 18-24 month construction period can meaningfully alter the total cost for buyers funding payments in a foreign currency. We recommend building a currency buffer of at least 10% into any off-plan acquisition budget.
FAQ
How do we verify a developer's track record on Phuket?
Our analysts cross-reference the list of completed projects against public records at the Department of Business Development and local building permit registries, then confirm findings with an on-site inspection. We calculate actual delivery delay for each project by comparing the original permit timeline with the actual completion date. A developer with three or more delivered projects and an average delay of six months or less receives a positive track record rating.
What permits must be in place before a buyer should commit funds?
The minimum set is a valid Building Permit, a Chanote land title for the plot, and where required by project scale, an approved EIA report. For Phuket projects above 80 units or 4,000 sq m of usable area, an EIA is mandatory under Thai environmental law. A missing or pending EIA on a qualifying project is, in our assessment, an unconditional red flag.
What is an EIA and when is it required on Phuket?
An Environmental Impact Assessment (EIA) is a statutory environmental review required in Thailand for residential projects exceeding 80 units or 4,000 sq m of gross floor area. On Phuket the threshold is also triggered by projects on slopes above 35 degrees or within designated environmental protection zones. Hillside developments in areas such as Kamala, Patong hills, and parts of Layan are particularly exposed to this requirement.
What payment schedule is considered safe for off-plan purchases?
Based on our methodology, a safe schedule is one where cumulative payments before key handover do not exceed 40-50% of the purchase price, adjusted downward for less-established developers. Each tranche should be tied to a verifiable construction milestone: foundation completion, shell structure, internal fit-out, and handover. Any schedule demanding more than 50% of the purchase price within the first three months of signing is assessed as aggressive and warrants additional scrutiny.
How do we check a developer's corporate standing in Thailand?
We use the DBD data warehouse (datawarehouse.dbd.go.th), which is publicly accessible. Key data points are registered capital, shareholder structure, annual financial filings, and any recorded litigation. Where the project is held in an SPV, we compare the SPV's registered capital against the estimated total project cost. A capital ratio below 10% of project value is flagged as a risk factor in our scoring.
What should an on-site inspection of prior projects cover?
We focus on buildings delivered two to three years before the inspection date. Critical checkpoints include waterproofing integrity (a primary failure mode in tropical climates), facade condition, drainage and stormwater management systems, and window and door frame quality. We also speak with the juristic person managing each building to gauge the developer's responsiveness to warranty claims and defect rectification.
Does a lower price on Koh Samui necessarily mean higher risk?
Not automatically, but a correlation exists. Off-plan prices in Koh Samui markets such as Lamai and Maenam can run 20-30% below comparable Phuket projects in Bang Tao or Layan. Part of that gap reflects lower land acquisition costs. However, in some cases a below-market price compensates for a weaker track record or the absence of bank financing. We assess each project individually rather than applying a blanket price-to-risk assumption.
What is the market standard for delay penalty clauses on Phuket?
The standard clause in Phuket off-plan contracts provides a penalty of 0.01% of the contract value per day of delay. Better-positioned developers offer 0.05% per day. The complete absence of any delay penalty clause in a purchase contract is, in our view, a serious warning sign - it indicates the developer is not prepared to underwrite their own construction timeline.
How significant is currency risk across a typical construction period?
For buyers funding payments in a currency other than Thai baht, a two-year construction period carries meaningful exchange rate exposure. Even a moderate shift in the baht's value over 18-24 months can alter the effective acquisition cost by several percentage points. We recommend treating a 10% currency buffer as a minimum planning assumption, not an optional contingency.
How does the SPV structure affect buyer risk?
When a developer creates a separate legal entity for each project, the financial strength of the parent brand does not automatically extend to the project company. If the SPV's registered capital is minimal and the project stalls, buyers' contractual claims are against an entity with limited assets. This is one reason our methodology always includes an SPV-level DBD check, not just a brand-level reputation assessment.
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