Yesterday’s removal of Thailand’s Prime Minister Yingluck Shinawatra in a ruling by the country’s Constitutional Council for what is described as “abuse of power.”
Yingluck was Thailand’s first female Prime Minister and came to power on August 5, 2011. She is the sister of the ousted former Prime Minister Thaksin Shinawatra, will be replaced by 66-year-old previous deputy prime minister Niwatthamrong Boonsongpaisan until elections can take place.
Her ousting was widely predicted after months of political chaos, and came as no surprise to many property market experts.
Simon Landy, Executive Chairman of Colliers International Thailand, told DDproperty.com: “The property market has already been hit by the political situation in Thailand and I don’t think the removal of the Prime Minister, which was widely anticipated, will have a major additional impact on sentiment.
“The market, like the country, is in effect waiting for a political solution and although many factors are in place for recovery, that won’t really happen until buyers and sellers feel more confident that the economy will not be adversely affected by politics.”
Veteran Bangkok-based real estate agent David Smith of Lifestyle Property Thailand also felt there will be little short-term impact on the property and real estate markets in the country.
He told DDproperty.com: “I suspect overseas buyers will sit back and wait to see who is eventually sworn in as absolute successor, and also keep one eye on the baht value.
“With yet another change at the top, business could well suffer a bit of a standstill for the next few weeks or months, which could have a negative impact on the baht.
Smith added that many of his buyers have been waiting and watching since January, with the possibility of buying later in the year as they believe they may very well save on currency alone.
He added: “I do not expect to see many properties drop their prices as most owners in Thailand are not in a position where they must sell – such is the level of wealth and financial stability.
“What we may see is many of them withdraw from the selling market and move to the rental market. Indeed I have seen this quite a few times recently as buyers realise that now is a buyers’ market, which perversely of course it is not as sellers will not drop their prices for the reasons mentioned.”
Chonburi-based agent Cees Cuipers of Town & Country Property was slightly more pessimistic.
He told DDproperty.com: “I think for the’ immediate’ impact we can expect a temporarily domestic slowdown until there is more clarity of what will happen next.
“I don’t think the international market will change much as the political turmoil has been going on a little too long now and isn’t any headline news anymore.
“As for the market in general on the Eastern Seaboard, I foresee a downfall within Q4 2014, or at the latest Q2 2015. I’d like to add that’s a positive downfall as there will still be an interesting buyers’ market with good re-sales and a healthy secondary market.”
The view from overseas was largely similar.
Chop Lin, Business Development Manager for Singapore-based real estate agency Trillion that has sold a number of Thailand projects to Singapore investors, told DDproperty.com: “Unless there is a drastic change in the Thai property laws, I don’t think Yingluck’s removal from power will have a serious effect on Thai property market.
“Thailand has undergone many political coups before, and each time the property scene has rebounded better than ever.
“No doubt any mass protests will certainly cause inconvenience to daily life, but it takes more than that to bring the entire market to a screeching halt since the local Thais still account for a sizeable portion of property buyers and investors in Thailand.
“I think that first-time investors will certainly take a wait-and-see approach, but seasoned investors understand that this is part and parcel of Thailand’s political history. Property speculators will definitely be affected, but then again speculating in properties, like any form of investments, will always carry risks.”
A new election is slated for July 20 but it seems far from certain to go ahead.
Image of former Thailand Prime Minister Yingluck Shinawatra taken on July 3, 2011, by ‘Ratchaprasong’ and used under a Creative Commons Licence.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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