BANGKOK: The conflict in the Middle East is shaking the global economy, but it may also create an opportunity for Thailand’s property sector to emerge as a new destination for wealthy buyers shifting away from Dubai and into the ultra-luxury residential market.
Prasert Taedullayasatit, President of the Thai Condominium Association, said the conflict in the Middle East remains difficult to predict and is already sending shockwaves through money and capital markets worldwide, including Thailand. Businesses therefore need to respond cautiously in terms of investment, liquidity management and contingency planning.
“The overall Thai economy this year is likely to recover slowly because momentum from the global economy has begun to weaken, while geopolitical uncertainty continues to weigh on investment. This is an uncontrollable factor, and Thailand must adapt and look for new markets in order to create opportunities amid volatility,” he said.
Thailand seen as a second home for global wealth
Amid growing uncertainty in the Middle East, ultra-wealthy investors are increasingly looking for safe havens to diversify their assets.
Thailand is being viewed as one of the leading options, both as a world-class tourism destination and as a holiday-home market for foreign buyers. High-potential locations include Bangkok, Chon Buri, Phuket and Koh Samui.
Key supporting factors include Thailand’s healthcare infrastructure, education system and geopolitical environment, which is free from severe conflict. As a result, Thailand’s property market is increasingly being seen as a “global-level market” capable of absorbing demand from foreign investors.
“The Dubai property market, which was once among the hottest in the world and was seen as a safe destination for oil wealth, is now facing an important turning point because of the global political situation, Prasert said.
"Perceptions of safety have shifted. Instead of being a haven, Dubai risks becoming a missile magnet or a target in the conflict. This creates a golden opportunity for Thailand to attract these investment flows, as Thailand is well supplied with luxury property.”
Turning crisis into opportunity through property
Prasert proposed that the government should use this moment to introduce proactive measures and policies to draw capital from wealthy Middle Eastern buyers and foreign investors.
Measures that should be considered include promoting long-term residential stays, with a focus on attracting foreigners to remain in Thailand for extended periods in order to support the ultra-luxury segment and create a clearer tax base.
He also proposed amending the law on long-term leases by extending lease contracts to 50 years, arguing that this would improve transparency and make decision-making easier for foreign buyers.
In addition, he suggested that tax revenue collected from foreign property buyers should be channelled into a soft-loan fund, or a special low-interest scheme, to help Thai citizens buy their first home more easily. This, he said, would reduce inequality and keep money circulating in ways that benefit people in the country.
“The war could become a turning point for property purchases in Dubai, causing part of the demand from wealthy buyers to flow into Thailand, provided the government acts at the right time. If the tax structure and regulations are designed appropriately, property could become an important engine of the Thai economy,” Prasert said.
Prolonged conflict could raise material costs and weaken demand
Nuttaphong Kunakornwong, Chief Executive Officer of SC Asset Corporation Plc, said the impact of the conflict would depend largely on how long the war lasts.
If the situation drags on for six to 12 months, oil prices and transport costs for imported construction materials could rise, putting pressure on property-sector costs and domestic purchasing power. At the same time, higher travel costs driven by energy prices could affect long-haul tourism over the longer term.
However, he said Thailand may also benefit from the relocation of some groups of foreigners seeking greater stability.
Thailand’s geopolitical balance could support capital inflows
Thailand’s neutral stance on the international stage is seen as a positive factor in the eyes of foreign investors. The country has strengths in terms of resources, location and quality of life that could support relocation by foreign residents.
Additional policy ideas proposed by the private sector include extending land lease periods and offering long-stay visas for long-term residents, with designated zones or property formats for foreign buyers.
These measures, they argue, would not only support the property sector but also generate wider economic benefits through investment, employment and domestic consumption. - The Nation/ANN
