Wealthy Thais cut London buying and turn to Japan property

Wealthy Thai investors are shifting from buying to renting property in London as economic uncertainty, higher ownership costs and the continuing effects of Brexit make long-term commitments less attractive.

Investment budgets are also shrinking, while some capital is being redirected towards Tokyo and Niseko, where the weaker yen, lower market volatility and strong infrastructure are seen as supporting property investment.

London has long been a preferred destination for wealthy Thai families seeking homes for children studying in Britain and assets to hold over the long term.

That approach is now changing as Britain faces continued economic pressure from Brexit, political uncertainty and rising property ownership costs.

Rather than abandoning London entirely, Thai investors are seeking greater flexibility. Some families are renting homes from year to year while directing part of their investment portfolios towards Japan, where the weaker yen has increased their purchasing power.
 

Thai investors cut London purchases and diversify into Japan

Prapaporn Boonkajornkul, deputy managing director of Savills Thailand, said owning a condominium or house in London had been considered part of long-term family planning among wealthy Thais five to 10 years ago.

Many families bought property while their children were still at secondary school in preparation for further education in Britain.

London property was also regarded as a long-term investment in one of the world’s leading financial centres, where asset values had continued to rise. Thai investors were previously among London’s significant groups of foreign buyers from Asia.

The picture has since changed, not because Thai investors have lost confidence in London, but because the cost of ownership has risen.

Uncertainty in the global economy has also made holding cash and preserving liquidity more important than rushing to acquire expensive assets.

Uncertainty prompts switch from buying to renting

“Thai investor behaviour in London’s property market has changed noticeably,” Prapaporn said.

“Most clients previously chose to buy and hold property over the long term, but the Covid-19 pandemic, the continuing effects of Brexit and uncertainty over British government policy have made long-term investment decisions more difficult.”

Thai families are still sending children to study in Britain, but many now choose annual rental agreements rather than purchasing homes as they did in the past.

They are waiting for greater clarity over Britain’s economy and government policy before committing to ownership.

The shift from owner to tenant reflects the growing value placed on flexibility at a time when uncertainty itself has become an investment cost.

Budgets fall to £800,000–£1.5 million

Prapaporn identified falling investment budgets as another clear sign of changing demand.

Wealthy Thai clients previously allocated about £1.5 million–£5 million to London property, equivalent to approximately 67.35 million–224.49 million baht at an exchange rate of about 44.90 baht to the pound.

Most current budgets have fallen to between £800,000 and £1.5 million, or approximately 35.2 million–67.35 million baht.

Demand for homes priced at about £500,000, or roughly 22 million baht, has also risen significantly.

However, land and property prices in central London remain high, forcing investors with smaller budgets to look beyond the city centre.

Buyers move from prime central London to Zones 2 and 3

Prime central London remains a high-priced luxury market.

As purchasing power weakens, Thai investors are increasingly considering properties in Zones 2 and 3, particularly developments along the Elizabeth line.

These locations provide convenient access to central London at more affordable prices.

The shift does not necessarily indicate weaker interest in London property. Instead, investors are adjusting the balance between location quality and value for money.

Brexit continues to weigh on Britain’s economy

Prapaporn said the effects of Brexit remained visible even though several years had passed since Britain left the European Union.

Trade costs have risen, economic growth has slowed and businesses have had to adapt to new regulations. Labour and immigration policies have also continued to change.

Geopolitical tensions, wars and volatile energy prices have further weakened investor confidence.

For foreign investors, the main concern is not only the price of property but also whether future economic and policy conditions can be predicted.

When the outlook becomes harder to assess, long-term investments are more likely to be postponed.

Weaker yen creates opportunities for Thai capital

Japan, by contrast, has emerged as an increasingly attractive destination for Thai property investors.

One of the main reasons is the yen’s depreciation against the baht, which has significantly increased Thai purchasing power.

A Japanese property priced at the same level now costs less when converted into baht, allowing investors to acquire assets of comparable quality with less capital.

For investors, such currency conditions present an opportunity that does not occur frequently.

Japan offers stability as well as lower entry costs

Japan’s appeal is not based solely on lower prices.

Although its economy may not deliver rapid growth, investors see stability as an advantage in the property market.

Japan has relatively low market volatility, a stable legal system and strong infrastructure.

It is also one of the world’s leading tourism destinations, supporting consistent property returns and making the market suitable for portfolio diversification.

London serves education needs, Japan investment returns

The purposes behind purchases in London and Japan also differ.

London remains closely associated with education, with many buyers seeking accommodation for their children.

Japan, particularly Tokyo and Niseko in Hokkaido, is more often viewed as a destination for investment assets.

Niseko continues to attract foreign investors because of its status as a globally recognised ski destination, while Tokyo maintains strong residential demand.

Japan also has a strong rental market.

For Thai investors, the country is therefore becoming more than a tourism destination and is increasingly seen as a market for generating long-term returns.

United States and Canada remain less attractive

Despite the size of their economies, the United States and Canada are not yet preferred property markets for many Thai investors.

Both present constraints involving laws, taxation and property ownership rules, which may vary between states or provinces.

This complexity encourages investors to choose markets with rules that are easier to understand.

Japan also benefits from its proximity to Thailand, convenient travel links and familiarity among Thai buyers.

Foreign investors continue to view Thailand as a safe haven

While Thai investors are increasingly diversifying overseas, Prapaporn said foreign buyers continued to show interest in Thai property and regarded Thailand as a safe haven.

Savills is preparing to organise overseas roadshows for luxury Thai property developments in the fourth quarter to meet demand from foreign buyers seeking homes and investment assets.

“The main target is the luxury segment priced from 10 million–20 million baht and above,” she said.

“Buyers from Singapore, China and the Middle East focus on central business district locations, the brands of listed developers and rental returns. We are therefore preparing to take Thai projects back to overseas roadshows after activity slowed during the Covid period.”

Savills Thailand currently operates two main businesses: property management and agency services.

Its consultancy team covers research, valuations and investment advisory services, linking the company’s operations to serve clients across different market segments.

Source: Bangkokbiznews