The Thai Market Paradox: Transaction Growth Amid Falling Average Deal Size
In the fourth quarter of 2025, foreign buyers purchased 3,888 condominiums in Thailand - 9.3% more than a year earlier. The total transaction value rose to 16.83 billion baht (+9.5%). But for the entire 2025, the picture looks different: 14,899 units sold (+2.2%) with a total value drop of 10.7% to 60.92 billion baht. The average deal size decreased, while the foreign share in the market structure by value reached 25% - the highest in the past three years.
This statistic from the Real Estate Information Center (REIC) and Government Housing Bank reveals a structural shift: foreigners are actively buying budget studios and one-bedroom apartments of 25-40 m², abandoning spacious properties. The reason is a change in investment strategy and growing interest in short-term rentals through Airbnb.
For Pattaya, where 7 projects with 2,386 apartments worth 12.37 billion baht were launched in the first quarter of 2025, this trend means restructuring the supply: developers are reducing unit sizes, increasing construction density, and targeting the 2-4 million baht per unit segment.
Who's Buying and for How Much: Breakdown by Country
According to REIC data for the first quarter of 2025, China maintains its lead with 1,481 transactions totaling $180 million. The average Chinese buyer's deal size is $120,785, with an average area of 37.1 m². Chinese buyers purchase in volume but choose compact properties in liquid locations: Bangkok (BTS districts), Pattaya (Jomtien, Wong Amat), Phuket (Patong, Kamala).
Myanmar took second place with 439 transactions worth $46.75 million. Average deal size - $106,055, area - 34.9 m². Buyers from Myanmar prefer studios in Bangkok for short-term rentals or as a safe asset amid instability in their country.
Russia is third with 288 transactions worth $29 million. Average deal size - $100,163 (about 3.5 million baht), area - 38.9 m². Russian buyers choose slightly more spacious properties than Asian investors but have still shifted to the budget segment. A year ago, Russians' average deal size was 12-15% higher.
Buyers from the USA, UK, and Australia form the premium segment: average area 52-60 m², deal size $138,000-168,000. These clients seek accommodation for long-term living, not rental investments.
Why the Average Deal Size Is Falling: Three Reasons
First reason - change in investment model. Buyers from Russia, China, and CIS countries increasingly view condominiums as tools for short-term rentals. A 28-32 m² studio for 2.5-3 million baht in Pattaya generates 15-25 thousand baht per month at 60-70% occupancy. Annual yield - 6-8%, higher than bank deposits and comparable to stock returns.
Example: a buyer from Moscow purchased a 28 m² studio in a Jomtien project for 2.8 million baht in March 2025. The apartment rents through Airbnb for 1,200 baht per night. With average occupancy of 18 days per month, income is 21,600 baht. Minus management expenses (20%), utilities, and taxes - net profit is about 14,000 baht per month, or 168,000 baht per year. Payback period - 16.7 years, but considering asset appreciation, the investor breaks even in 10-12 years.
Second reason - premium segment saturation. In Phuket and Bangkok, supply of 60-100 m² apartments exceeds demand. Developers are reducing prices or offering 3-5 year interest-free installments. Buyers wait for further discounts, freezing transactions in the upper segment.
Third reason - currency fluctuations and capital export restrictions. Chinese buyers face a $50,000 annual limit on overseas transfers. Russian clients must use cryptocurrency or accounts in third countries, increasing transaction costs by 3-5%. Reducing the purchase budget compensates for these expenses.
How Pattaya Is Adapting: New Projects and Developer Strategies
Pattaya demonstrates the fastest growth in interest among Russian-speaking buyers: according to Tranio, demand in the first quarter of 2025 grew 52.88% year-on-year. Pattaya's share in the inquiry structure reached 25%, while Phuket decreased to 60.87% (-14.35%).
Developers responded by launching projects with compact units. In the first quarter of 2025, 7 new condominiums with 2,386 apartments entered the market. Average area - 35 m², price - 3.2 million baht. Main locations: Jomtien (beach proximity, developed infrastructure), Wong Amat (premium segment with sea views), Pattaya center (high foot traffic, demand for short-term rentals).
The PTY Residence Sai 1 project by Sansiri became a showcase case: all 3.3 billion baht in investments sold out in 3 hours, with 2,000 people remaining on the waiting list. Success is explained by the rare location in central Pattaya on the first line - such offerings haven't appeared in 15 years. Average apartment area - 32 m², price - 4.2 million baht.
Origin Property, Riviera Group, and AssetWise also launched projects focusing on the budget segment. Riviera offers 28 m² studios for 2.6 million baht with 3-year interest-free installments. AssetWise emphasizes infrastructure: rooftop pool, co-working space, laundry - amenities that increase attractiveness for short-term rentals.
Median Budgets Are Falling: Figures by Region
According to Tranio, the median buyer budget in Pattaya decreased from €120,000 in the first quarter of 2024 to €100,000 in 2025 (-16.67%). In Phuket, the decline is even more noticeable: from €138,340 to €121,690 (-12.04%). On Samui, the median budget fell from €202,455 to €200,000 (-1.21%).
This doesn't mean the market is getting cheaper. Per-square-meter prices in new projects increased 3-5% year-on-year. But buyers are choosing smaller areas, reducing the final transaction amount.
Bangkok entered the statistics of Russian-speaking buyers for the first time comprehensively: median budget - €153,718, share in demand structure grew 504.89% year-on-year. The capital attracts investors with stable rental demand from expats and students.
Changing Purchase Goals: Rentals Displacing Relocation
Analysis of Tranio data for the first quarter of 2025 shows shifting motivation. Purchase for vacation increased 32.22% compared to 2024 and 75.4% compared to 2023. The combined goal "vacation + rental" decreased 4.94% but still shows growth of +9.58% relative to 2023.
The biggest decline - in the "for future relocation" goal: -44.44% compared to 2024 and -58.73% compared to 2023. Purchase for obtaining residence permit or citizenship fell 61.11% compared to 2024 and 72.49% compared to 2023. Thailand doesn't offer direct "citizenship for investment" programs, and visa legislation is tightening: since 2024, obtaining a retirement visa requires an 800,000 baht deposit or 65,000 baht monthly income.
Buyers are refocusing on short-term rentals as the main income source. A studio in Pattaya for 2.5-3 million baht generates 150,000-200,000 baht per year with proper management. This is more attractive than long-term rentals (4-5% annual yield) and doesn't require the owner's constant presence.
Legal Nuances for Foreign Buyers
Foreigners can own condominiums in full ownership (freehold), but the total foreign ownership share in a project must not exceed 49% of total area. Before purchasing, check with the Land Office whether the quota has been exhausted.
When registering ownership rights, a foreigner pays:
- Registration fee - 2% of cadastral value.
- Stamp duty - 0.5% (if the property is new and being sold by the developer for the first time).
- Ownership transfer tax - usually split 50/50 between buyer and seller, but in new projects developers often cover expenses.
Upon subsequent sale, the owner pays:
- Capital gains tax - progressive scale from 0% to 35% depending on ownership period and profit amount.
- Income tax on property sale - calculated by formula (cadastral value × coefficient × rate). For apartments older than 5 years, tax is minimal.
Financing through local banks is available but at high rates: 5.5-7% annually, down payment from 30%. Most foreigners buy with cash or take loans in their country of origin.
Risks Developers Don't Mention
Oversupply. In Pattaya at the end of 2025, there were 50,186 condominiums, of which 25.45% (12,776 units) remain unsold. If supply continues to grow faster than demand, rental rates and secondary market prices will decline.
Regulatory risk. The Thai government may tighten ownership rules for foreigners or introduce additional taxes. In 2023, raising property tax for non-residents was discussed, but the bill didn't pass. The risk remains.
Currency risk. The baht-to-ruble exchange rate rose from 0.25 at the beginning of 2022 to 0.35 at the end of 2025 (+40%). A buyer who paid for an apartment in rubles lost 40% purchasing power. Hedging through cryptocurrency or multi-currency accounts reduces risk but requires additional knowledge.
Management quality. Developers transfer condominium management to third-party companies that don't always handle tasks well. Low occupancy, poor service, inflated utility bills - common owner complaints. Before purchasing, study the management company's reputation and contract terms.
What This Means for Buyers in Pattaya
Pattaya is becoming the center of budget real estate investments in Thailand. Demand growth of 52.88% year-on-year and the launch of 7 new projects with 2,386 apartments confirm: the city attracts buyers with affordable prices, developed infrastructure, and high short-term rental potential.
For investors, this means:
Competition is growing. New projects emerge every quarter, supply is increasing. To stand out in the rental market, choose properties with good infrastructure: pool, fitness, co-working. Proximity to beach and shopping centers increases occupancy by 15-20%.
Budget of 2.5-3.5 million baht is optimal. Studios and one-bedroom apartments of 28-35 m² in this range show the best returns. Properties over 5 million baht pay back slower and require more active management.
Check the foreign ownership quota. In popular projects, the 49% fills quickly. If the quota is exhausted, you'll be offered registration through a Thai company (which is illegal) or 30-year leasehold (less profitable for resale).
Calculate real returns. The 8-10% annual returns claimed by developers are rarely achievable. Account for management expenses (15-25% of income), utilities (1,500-3,000 baht per month), taxes (15% of rental income for non-residents), repairs, and vacancies. Real return - 5-7% in the first years.
Diversify risks. Don't invest all capital in one property. Two studios at 2.5 million baht each in different Pattaya districts reduce the risk of demand decline in one location and increase overall occupancy.
Work with a local lawyer. Verifying transaction clarity, proper execution of sale-purchase agreement, and Land Office registration require knowledge of Thai law. Lawyer services cost 20,000-40,000 baht but save hundreds of thousands when disputes arise.
Pattaya offers one of the best balances of price, yield, and liquidity in the Thai market. But investment success depends on thorough analysis of the project, location, and management company. Buy with a cool head, not under seller pressure.
