The Thai Baht continues to make gains against most major currencies, especially the US Dollar, Euro and UK Pound. In fact, the Baht to Euro and Pound exchange rates continue to hit historic levels while the Thai currency hasn’t performed this well against the dollar since 2013.
This has hit the Thailand property market. According to Knight Frank Thailand, the sales rate for new condos in the Thai capital slowed to the lowest levels ever in the second quarter of this year. A shrinking number of overseas investors is just one of a few issues facing the market.
And while there is some cause for concern about the property market, especially among overseas investors, it has also opened up new doors for local and expat property investors who are now seeing their money go a lot further than in the past.
Locals look abroad for real estate
A strong Thai Baht has created international property investment possibilities for both local Thai buyers and expats that were unappealing when exchange rates were unfavourable. The UK in particular has proven to be popular because of the flagging Pound.
For Thai buyers, this is a chance to diversify their property investment portfolio at a fraction of the price. The UK real estate market is seen as a stable investment and one that is well-known among Thai buyers with many having either studied abroad in England or planning to send their children there for education.
“In context with wider economic trends, there is a current perception amongst overseas buyers that now is the time to purchase to benefit from the UK’s property market, before the sterling regains its full strength,” Jerald Solis, Business Development and Acquisitions Director at Experience Invest, told Thailand Property. “At Experience Invest, we believe when the dust settles after the UK leaves the EU, and some of the new trade negotiations are in place, the pound will recover back to the pre-Brexit level.”
Additionally, “Golden Visa” programs that offer EU residency for property investors are proving to be popular as well. Excellium Capital has hosted several Invest in Portugal seminars in Bangkok, all of which have recorded a strong turnout.
See more: Invest in Portugal by Excellium Capital
Meanwhile, expats based in Thailand are beginning to leverage the soaring Baht to purchase property in their home countries. Before the uptick of the Baht, this was unthinkable.
Thai Baht expected to remain strong
The Thai Baht has been Asia’s best performing currency with it ending the first half of 2019 up five percent year-on-year. Kobsidthi Silpachai, Head of Capital Markets Research at KBank, explained to the Bangkok Post that the bank doesn’t foresee a downturn for the Baht until next year due to global and local economic circumstances.
The strong Baht has dented tourism and economic growth in Thailand, but it is not all bad news for overseas real estate investors looking at the Kingdom. Many developers have been offering steep discounts in order to clear out current inventory helping offset the unfavourable exchange rate.