Thailand's Real Estate Sector Braces for Turbulence

As global trade war anxieties intersect with a surge in foreign investment, Thailand's real estate sector is preparing for potential turbulence in 2025. Analysts at a major industry seminar have highlighted both the challenges and opportunities that lie ahead for developers.

Economic Headwinds and Emerging Opportunities

Leading figures from the Thai Development Research Institute (TDRI) and Asia Plus Securities have warned of economic headwinds, while also pointing out emerging opportunities for developers. Dr Kirida Bhaopichitr, TDRI's Economic Intelligence Service Project director, identified US trade policy under the second Trump presidency as a significant risk to both the Thai and global economies.

Trade War Impacts and Investment Opportunities

The US Trade Representative's Office (USTR) is expected to announce trade measures on April 2, potentially targeting Thailand due to its trade surplus with the US. Amidst these challenges, the trade war is also driving a significant shift in global production, presenting Thailand with unique investment opportunities, particularly in the Eastern Economic Corridor (EEC).

Tourism and Real Estate Development

Tourism is expected to provide a boost to the real estate sector, with TDRI projecting up to 40 million foreign tourists in 2025. This influx could stimulate demand for condominiums, mirroring pre-pandemic trends. However, developers are advised to manage liquidity risks carefully and reduce existing inventory accumulated from recent slow sales.

Government Support and Future Outlook

The assistant director of the Government Housing Bank's Real Estate Information Center, Sitthiphen Sitthattapong, emphasized the importance of government support measures for the sector. While 2024 saw a decline in residential sales and transfers, developers anticipate a rebound in 2025, with increased new project launches, contingent on economic trends and continued government stimulus measures.

Conclusion

The seminar underscored the complex interplay of global economic forces and domestic market dynamics facing Thailand's real estate sector. While trade war anxieties loom, the influx of foreign investment and a resurgence in tourism offer potential avenues for growth.