Global trade war turbulence casts shadow over Thai property sector

Surge in investments into the country expected to open up opportunities

 

Thailand's real estate sector is bracing for potential turbulence in 2025, as trade war anxieties intersect with a surge in foreign investment, according to analysts at a major industry seminar. 

 

Leading figures from the Thai Development Research Institute (TDRI) and Asia Plus Securities warned of economic headwinds, while highlighting emerging opportunities for developers.

 

Dr Kirida Bhaopichitr, TDRI's Economic Intelligence Service Project director, identified US trade policy in the second Trump presidency as the most significant risk to both the Thai and global economies. 

 

The US Trade Representative's Office (USTR) is expected to announce trade measures on April 2, and Thailand, which enjoys a trade surplus with the US, is likely to be targeted.

 

"Thailand will need to navigate these trade tensions carefully," Kirida said. "Increased imports from the US and a reduction in trade barriers may be necessary, potentially opening markets for US agricultural and automotive products."

 

Amidst these challenges, the trade war is also driving a significant shift in global production, presenting Thailand with a unique investment opportunity. Similar to the "Plaza Accord" 40 years ago, which spurred Japanese investment, the current climate is attracting record levels of foreign direct investment, particularly in the Eastern Economic Corridor (EEC).
  

 



 


"The EEC is poised for substantial growth," Dr Kirida noted, "offering significant potential for real estate development following industrial investment."


 

Tourism is also expected to provide a boost, with TDRI projecting up to 40 million foreign tourists in 2025. This influx could stimulate demand for condominiums, mirroring pre-pandemic trends. However, challenges remain. 

 

The assistant managing director of Asia Plus Securities, Therdsak Thaweetheeratham, highlighted the need for developers to reduce existing inventory, accumulated from recent slow sales. 

 

He noted that while new project launches were expected to decrease slightly, ongoing development projects remain substantial.

 


"The second half of 2025 is a concern," Therdsak warned. "Intensifying trade tensions will impact supply chains and consumer purchasing power. Thailand faces these challenges with limited fiscal and monetary policy options."
 
 



 

Financial analysis reveals that real estate companies have relied heavily on corporate bonds for project financing. While the current low-interest-rate environment is supportive, developers are advised to manage liquidity risks carefully.

 

The assistant director of the Government Housing Bank's Real Estate Information Center, Sitthiphen Sitthattapong, emphasised the importance of government support measures for the sector. 

 

While 2024 saw a decline in residential sales and transfers, particularly for single-detached houses, developers anticipate a rebound in 2025, with increased new project launches.

 


"The 2025 outlook depends on economic trends and government support," Sitthiphen said. "Continued stimulus measures will be crucial for the sector's recovery."


 

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.

(2025/03/13-00:00)