Brexit 'won't hit Thai demand for UK property'

Leaving EU will lower prices, say consultants

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Demand from Thai buyers for British properties will continue to rise regardless of whether Britain votes to leave the European Union tomorrow, say property consultants.

"A Brexit scenario could affect market sentiment in the short term without a significant effect on property prices," said Phanom Kanjanathiemthao, managing director of Knight Frank Chartered (Thailand).

Attractive investment gains and rental returns of as much as 10% a year should continue in capital London, he said.

London property has drawn great interest from Thai investors in recent years.

The property market seems to be pausing as buyers and sellers await the result of the referendum in Britain.

"The market is softening a little bit but that doesn't mean a fall in prices. A negative impact from Brexit will be a weakening of the pound, which would be a good chance for overseas buyers to get a lower price from the depreciation," Mr Phanom said.

Nicholas Holt, head of research for Asia-Pacific at Knight Frank, said the situation was similar to London's mayor election, which froze property activities for a while.

"If Britain remains [in the EU], activities will rebound. If it exits, the pound will fall by around 15-20%," said Mr Holt, a British-born expatriate in Singapore.

Mr Phanom said a falling pound would boost property demand in Britain among foreign investors and buyers, possibly leading to a rise in prices.

According to Knight Frank, Savills and Jones Lang LaSalle, British property will remain attractive to high-net-worth buyers. Residential prices in prime central London areas are expected to grow by 19-21% from 2016 until 2020, with properties in prime outer London areas set to rise by 18-22%.

Thais have bought a huge number of British properties, especially in London, with more than 80% of properties bought for their children studying there. The most popular educational institutions among Thais are King's College, Imperial College and University College London.

According to Knight Frank's Wealth Report 2016, Thailand's outward investments rose by 1,054% to US$76 billion from 2005-15, second only to China's growth of 1,471% to $1 trillion.

The number of Thai ultra-high-net-worth people with assets of more than $30 million increased by 135% to 572 in 2015 from 243 in 2005. The figure is expected to rise by 80% to 1,030 in 2025.

The growth of super-rich Thais was higher than Asia's average of 134%. Asia was ranked the second-largest area for growth following Russia and the Commonwealth of Independent States countries.

Thais with assets of more than $1 billion totalled nine in 2015, up from four in 2005, and the number is expected to rise to 16 in 2025, while those with assets of $1 million totalled 20,700, up from 8,800 in 2005.

Last year Vancouver was ranked the city with the largest growth in the prime residential index with an increase of 24.5%, followed by Sydney (14.8%) and Istanbul (13.5%), while Bangkok and Phuket were ranked 15th and 25th with increases of 6.3% and 4.1% respectively.

In Asia, Bangkok was second only to Shanghai (14.1%).

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