29 Sep UK property holds strong appeal for Asian buyers
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Many developers of property projects from other countries have conducted sales campaigns in Thailand during the past couple of years, especially for projects originating in the United Kingdom. These have included residential properties, car parking locations, warehouses and university dormitories, and all have received good feedback from Thais. This favourable response has come despite relatively high selling prices — as much as 20 million baht for a one-bedroom condominium unit and 1 million baht for a one-car parking space.
The number of UK property projects being offered abroad has risen dramatically since mid-2016 after the Brexit vote, which directly affected the value of the pound. For Thai buyers, the exchange rate fell by around 10% in favour of the baht and has remained so since then.
The weakness of the post-referendum pound has made UK property more interesting, and many foreign investors are looking once again to buy property in London. The number of foreign tourists and visiting students has increased, especially those from Asia. In addition, economic conditions and local purchasing power in Britain have still not recovered and the country is experiencing lower growth compared with the past.
But property developers in the UK still need to grow every year, and all international property agencies and consultancies in Britain with branches around the world are stepping up their marketing to foreigners, with Asia their main focus.
One other noteworthy trend is the rise in the number of international firms that are entering the British market to sell residential projects to Asians. This reflects high purchasing power in Asia and a general tendency among Asians to favour property as an investment over other asset classes. In addition, a lot of students from many countries in Asia are already studying in Britain.
Thailand is one of the targets for developers of UK properties. Some 6,095 Thai students are studying in Britain, and that is attracting the attention of UK developers. The total number of Thai students in the UK is dramatically lower than the number of Chinese students (91,220), so most developers and agencies are focusing increasingly on Chinese buyers.
Even so, many large property firms with international connections are confident of seeing more interest from Thai buyers, with numerous projects from the UK being offered in Thailand in the past two years. The main reasons that Thai buyers want to buy property in the UK are long-term investment, the weak pound, continuing property value growth and the strong desire to have their children enjoy the opportunity to study in the UK. Thus, most of the residential projects from the UK that are selling in Thailand are in London or close to a university.
Apartment and condo prices in London continue to rise steadily, averaging 3-5% annual growth for the past three years. Although the increase may seem modest, once you factor in the currency exchange rate, the prices and potential for appreciation become more attractive.
Housing demand among local people and foreigners working or studying in the UK is also strengthening every year. But getting a mortgage is not easy, and many Britons under 40 still choose to rent rather than buy. Rental demand from this group is a main factor spurring developers and international agencies to offer properties for sale to foreign investors.
Another selling point for UK property is the expected appreciation in value as the pound revives, coupled with the natural tendency for property values to rise year-on-year.
The UK property market is still trending lower, and this situation will probably continue until the Brexit process is complete in two years. Now is the best opportunity to buy property in the UK or to visit there for travel as well as study.
Source: Bangkok Post