1. Introduction — The War That Returned Instead of Ending

In the first half of December 2025, renewed conflict between Thailand and Cambodia entered its fifth day, shattering a fragile calm that had lasted for months following earlier clashes in July and a subsequent ceasefire period. These confrontations are both tactical and political in nature — encompassing artillery fire, armored vehicles, and F-16 fighter jet strikes. The fighting has caused severe humanitarian consequences and forced hundreds of thousands of people to flee their homes on both sides of the border.

2. Historical Background of the Conflict

Historical tensions between Thailand and Cambodia stretch back decades. Border areas, particularly around the Preah Vihear and Ta Muen Thom temple complexes, have been subjects of territorial disputes for years. The situation stems from ambiguous colonial-era treaties and international rulings that left certain territories contested.

In 2025, clashes erupted again following a landmine incident that resulted in serious injuries to Thai soldiers. A series of battles in summer 2025 led to frontline combat and significant casualties among both military forces and civilians.

At the end of July 2025, both sides agreed to a ceasefire through the Kuala Lumpur Peace Accord, with mediators from ASEAN, the USA, and Malaysia present. However, the truce proved fragile, and the conflict reignited in December 2025.

3. Current Escalation in Early December 2025

Since early December, fighting has intensified significantly. Thailand and Cambodia accuse each other of border violations and provoking attacks occurring across several sections of the frontier. Both governments claim that the opposing side's actions violate their national sovereignty.

Key Events:

• Fighting is taking place across multiple border provinces, including Preah Vihear, Oddar Meanchey, and Banteay Meanchey, as well as on the Thai side.
• Thailand accuses Cambodian forces of rocket attacks and drone usage allegedly targeting military and — according to some reports — infrastructure assets. Cambodia firmly rejects these claims, calling them "false information" and accusing Thailand of spreading propaganda.
• Thai armed forces conducted airstrikes on military targets on the Cambodian side, claiming they were preparing for further offensive operations.

4. Scale of Human Casualties and Humanitarian Crisis

According to the latest data, as a result of intensified fighting:

• At least 20 people have lost their lives, with nearly 200 wounded.
• Over 600,000 people have been displaced from their homes on both sides of the border, constituting a serious humanitarian threat.

Local communities face difficult circumstances due to lack of access to food, water, and basic medical services. In many areas, schools and public infrastructure have been closed, with evacuated civilians seeking shelter in makeshift camps.

5. Role of Military Technologies in the Conflict

The conflict is characterized by the use of a wide array of weaponry:

• Artillery and rocket systems, including Chinese PHL-03 rockets, which Thailand has identified as a threat to its civilian population.
• Royal Thai Air Force F-16s participated in strikes on Cambodian force positions — one of the most serious episodes of modern fighter jet deployment in the region in many years.
• Drones and unmanned aerial swarms have reportedly been used by both sides according to media reports, though some accusations are disputed by the Cambodian side.

These modern warfare elements underscore how dramatically the face of contemporary border conflicts is changing.

6. Political Repercussions Within Thailand

The border conflict coincided with serious political turbulence in Thailand. Prime Minister Anutin Charnvirakul dissolved parliament, leading to snap elections within the next 45–60 days. The decision was confirmed on December 12, 2025, while the conflict continued to intensify.

The parliamentary dissolution reflects growing political tensions in the country, which had been building since a government crisis following leaked private conversations among politicians and consequent changes in prime ministers earlier in 2025.

7. Broken Ceasefire and International Mediation

In October 2025, a ceasefire was successfully negotiated in Kuala Lumpur under ASEAN auspices with participation from the USA and Malaysia. The agreement was meant to stabilize the situation and withdraw heavy weaponry from the border.

However, renewed clashes in December indicate that many of these provisions were not fully implemented, and key border issues remained unresolved. Consequently, the agreement effectively collapsed, and parties resumed fighting.

The USA — particularly President Donald Trump — announced talks with leaders of both nations in an attempt to re-engage in conflict de-escalation. Trump previously expressed the possibility of mediation and applying diplomatic and economic pressure to compel both sides to cease hostilities.

8. Outlook for 2026 — Possible Scenarios

Scenario 1: Negotiations and a New Ceasefire Agreement

Under international pressure, ASEAN and the United States may act again as mediators and attempt to achieve lasting peace. In this scenario:

• The border would be partially demilitarized,
• Monitoring mechanisms for ceasefire compliance would be established,
• Both sides would agree to bilateral consultations regarding disputed territories.

Scenario 2: Protracted Clashes

Lack of agreement and escalating political pressure in Thailand, combined with strengthened national spirit on the Cambodian side, could prolong the fighting. This would worsen the humanitarian crisis and lead to greater civilian casualties.

Will the Conflict Affect Phuket, Koh Samui, and Thailand's Real Estate Market?

It's essential to emphasize clearly that the current armed conflict between Thailand and Cambodia is local and border-focused. Fighting is concentrated exclusively on specific sections of the eastern land border between the two states, located hundreds of kilometers away from Thailand's major tourism and investment centers.

Phuket and Koh Samui Remain Completely Outside the Conflict Zone

Popular islands such as Phuket and Koh Samui:

• Are located in the southern part of the country,
• Are geographically and logistically separated from conflict-affected areas,
• Operate normally — without disruptions to air traffic, tourism, or business activity,
• Are not subject to any security restrictions or warnings for foreign nationals.

International airports, tourism infrastructure, banking, and the real estate market on these islands operate without changes. Resorts, development projects, and property transactions proceed normally, and demand — especially from foreign investors — remains stable.

Why Thailand's Real Estate Market Isn't Reacting Panically

Historically, Thailand has repeatedly experienced political tensions or local border conflicts that had no lasting impact on the real estate market in tourist regions. This is due to several factors:

• Strong decentralization of the country — border conflicts don't spread to economic centers,
• Tourism and foreign investment's major importance to the Thai economy,
• Effective separation of military zones from civilian and tourist areas,
• Administrative experience in maintaining stability in key regions.

From an investor perspective, this means that Phuket and Koh Samui remain safe locations for capital deployment in real estate — both for short-term and long-term rental purposes.

What About Cambodia? Phnom Penh and Sihanoukville Outside the Conflict Zone

Phnom Penh, as Cambodia's capital and economic center:

• Functions normally,
• Reports no disruptions to banking, government offices, or the real estate market,
• Remains a stable administrative, financial, and residential hub,
• Continues attracting investors interested in the long-term market and local rental sector.

Meanwhile, Sihanoukville, despite its coastal proximity and international trade routes:

• Remains completely outside the military operations area,
• Maintains normal functioning of port, airport, and tourism infrastructure,
• Continues as one of Cambodia's key coastal property development centers,
• Is not subject to any official security warnings for foreign nationals.

Why Cambodia's Real Estate Market Remains Stable

Cambodia, like Thailand, has experience in separating local geopolitical tensions from economic centers. The government is committed to maintaining continuity of foreign investment, especially in Phnom Penh and Sihanoukville, which play crucial roles in the country's development.

In practice, this means that:

• Development projects continue,
• Property transactions proceed without disruption,
• The construction and rental sectors function normally,
• Foreign investors are not withdrawing en masse from the market.

2026 Outlook — Thailand and Cambodia Safe Outside Border Zone

Forecasts for 2026 indicate that border tensions should not spread to major cities and investment regions in either Thailand or Cambodia. Both Phuket and Koh Samui, as well as Phnom Penh and Sihanoukville, remain outside the operational risk area.

For investors, this means that:

• Conflicts are local and controlled in nature,
• Key real estate markets in the region maintain stability,
• Southern Thailand and Cambodia's main cities remain safe places for capital investment.

Sources

• Reuters: Thai PM says he will speak to Trump as Cambodia-Thailand fighting continues (December 12, 2025).
• Al Jazeera: Cambodia-Thailand fighting enters fifth day (December 12, 2025).
• The Guardian: Half a million flee as border clashes escalate.
• Reuters: Trump-brokered truce under threat as fighting reignites.
• AP News: Thailand launches airstrikes along border.
• Britannica & Wikipedia: historical background of the conflict and earlier clashes.
• National Herald & Kiripost: conflict developments and mutual accusations by both sides.