London has long been the only overseas destination Thai real estate investors would consider. There are a few reasons for this and while some investors are starting to consider locations outside of the English capital, this number remains relatively small.

“The main reason Thais purchase property in London is because they want to send their children to study in the UK,” Bangkok property expert Surachet Kongcheep stated. “For wealthy individuals, buying a residence allows their son or daughter to stay here when in school. They can then sell or rent out the property after graduation.”

For over 115 years, London has been the preferred destination for Thai students studying overseas. Samaggi Samagom, the association for Thai students studying in the UK, was established by King Rama VI in 1901 and helped form an educational link between the two countries. According to data from the Higher Education Statistics Agency, there are currently more than 6,000 students from Thailand studying in the UK.

“While there is some Thai interest in university cities outside of London, such as Manchester, it remains relatively limited,” Surachet stated. “The focus will likely remain on London with parents who plan on sending their children to school in the city being the most active buyers.”

Brexit makes London more attractive for Thai real estate investors 

Thais eyeing London real estate in the aftermath of Brexit have been able to take advantage of a weaker pound as well as the rising Thai baht. This made properties in London more affordable and provided many investors with a chance to act.

“There was a significant increase in activity after Brexit. Many Thais saw it as a good time to buy,” Surachet pointed out. “Interest will remain steady in the short term with the majority of Thai buyers using cash to pay for their property. While cost isn’t an issue for many buyers, units in the mid-range segment remain the most popular.”

Surachet adds that the long-term outlook of Thai investment in London real estate is not as promising.

“There could soon be a slowdown in interest for London property as many wealthy Thais have already acquired units in the city. While there will always remain some interest in London property from Thai buyers, demand may not stay at its current level,” he said.

Declining home prices now, but gains coming

A new report from Acadata found that house prices in London fell at the fastest pace since 2009 earlier this year. Average prices fell to THB 25.8 million (GBP 593,396) in January, a decline of 2.6 percent when compared to the same time last year.

The city’s most expensive boroughs were the hardest hit with prices in Wandsworth, the location of Battersea Park, falling by 14.9 percent while Southwark saw prices dip 12.2 percent. The falling home prices continue a trend that began at the start of 2017.

This comes after two decades of significant growth where home prices skyrocketed by 500 percent. Both Savills and KPMG Economics are predicting London home prices to stabilise in 2019 before trending back up in the years to come. The former is predicting price growth of more than seven percent in the capital between 2017 and 2020.

For Thai investors, it may make sense to wait until the market bottoms out either later this year or early in 2019. However, those acquiring London property for their child to use can be fairly confident buying now knowing while the price may drop some in the short-term, there will likely be capital gains by the time their studies have finished.

This story on Thai real estate investors can be found in Dot Property Magazine’s Southeast Asia Wealth And Outbound Investment Report 2018. Click here to read it.