2008 GDP Forecast 4% - 6%

1Q08:
Yr-on-Yr: 6.7% (LastQ: 5.4%)
Qtr-on-Qtr: 14.6% (LastQ: -4.8%)

"Export-oriented and sentiment-sensitive sectors will be hit more, while domestic-oriented sectors will perform better."

"MTI and MAS have revised the forecast for CPI inflation for 2008 from 4.5-5.5% to 5.0-6.0%."

* SingStat-GDP *

CPI Soared to 7.5%

Surprise or no surprise, S'pore Apr CPI at 26-yr high. With oil & commodities still going crazily high, inflation is set to soar further.

Mth-to-Mth: 1.2% (Last mth: -0.1%)
Yr-to-Yr: 7.5% (Last mth: 6.7%)
1st 04mth 2008: 6.9%

* StatSing-CPI , AsiaOne-CPI *

*****

*sigh* sian ah ... ...

Hotel Site At Little India Has No Bidders

This is the first time in 7yrs that a government land sales received no bids.

The 0.9ha site at Race Course Rd received no bids when tender closed yesterday. Consultants sited reasons such as image, location, crowds, poor market sentiments, etc. Higher construction costs would also be difficult for the budget hotel plot to generate good profits.

* AsiaOne-Hotel *

*****

I thot that was a good site for a budget hotel ... ... alas, the construction costs.

Couple's Financial Woes

This couple made a booking for a 5Rm HDB DBSS flat at City View @Boon Keng, which cost $675k. Now, they found themselves having difficulties in securing a home loan.

The couple's total income is abt $6k and they paid an option fee of abt $33k for the flat. They applied for HDB loan but was rejected, and private banks were only willing to loan up to $400k.

HDB claimed that Mr Tan's director's fee could not be used for credit assessment, and his fiancee did not have >=3mths continuous employment from the same company. Thus the loan was not approved.

Should Mr Tan give up this flat, he will have to pay a penalty of $8k (25% of option fee) to the developer, as full refund is only applicable to applicants who do not meet HDB's eligibility requirements, not for other reasons like loan issue.

* AsiaOne-Couple , AsiaOne-HDB *

Developers Facing Tighter Credits

Banks are charging more and lending less to property developers in Asia.

Although interest rates in S'pore and Hong Kong have fallen, but credit spreads on loans have shot up. Prior to sub-prime mortgage crisis, developers could borrow at <100 basis-point spreads, but now the spreads are at 200 to 400 basis points. Banks are also reducing the loan-to-value ratio from 70-80% to 50-60%. Thus, developers, especially those smaller players, are facing higher costs and lesser financing for their projects.

* AsiaOne-Funding *

Weaker Market In April

Developers sales fell in Apr, with only 274 transactions and was about 9% lower than Mar08. The median prices seemed to have dropped by 8.9% from $1,035 psf in Mar to $943 psf in Apr.

Some projects were seeing a drop in their median price ($ psf):
(a) 79-unit Blu Coral: $872 in Feb, $802 in Mar, $657 in Apr
(b) 106-unit The Verve: $1,187 in Mar, $1.055 in Apr
(c) 625-unit The Quartz: $742 in Mar, $721 in Apr

The 659-unit The Parc, which was reported fully sold previously, have put 43 units on sale recently. These units were from buyers who did not want to exercise their options and thus forfeiting a quarter of their 5% downpayment.

However, over at the 56-unit Stadia, 52 units were sold between $750 - $1,000 psf.

* AsiaOne-SofterMkt *

Can't Find Your Usual Snack In Geylang?

Most probably they have moved due to sky-rocket rentals, and some have set up their stalls elsewhere in Geylang.

Businesses between Lor1 and Lor25 are moving out as rents have doubled or even tripled, because of the 'red light districts'. Many men come from all over S'pore hang out at coffeeshops to look at or chat with the girls. Thus, many businessmen would want to open coffeeshops there due to high human traffic.

One casualty of high rental is Tanjong Rhu Pau. Its 1,600 sf space rental has increased from $9k/mth to $30k/mth. No choice, it has moved to a new location at Lor34 for just $4.5k/mth. Yong He Eating House, famed for its Taiwanese beancurd and youtiao, has to give up its 2,200 sf unit near Lor9 when the rent increased from $20k/mth to $40k/mth. Now, it pays only $28k/mth for a 3,600 sf unit at Lor27A. Though they may lose some customers, but given a cheaper rent, a better environment and ease of parking, it may just take time for the customers to find them and come back.

Where can you find them now ... ...
(1) Tanjong Rhu Pau - Corner of Guillemard Rd and Lor34.
(2) Yong He Eating House (Taiwanese beancurd & youtiao) - Lor 27A
So just keep your eyes wide open and hunt your favourite food/snack down in the lesser known Geylang lorongs.

* AsiaOne-Geylang *

Survival! - Suntec Mall Tenants

Tenants at the new Galleria area of Suntec mall were fuming because of low human traffic such that they could barely cover their rentals. Some quit, some stopped paying rents while some were looking for alternatives, such as asking the management to reduce rents.

Ave rents at the Galleria was $24 psf, but some were paying as high as $35 psf. According to the tenants, a typical rent guide would be 15% - 25% of the sales.

However, traffic may improve with the opening of the underpass connecting to CityLink mall and the dismantling of the overhead bridge to Suntec City.

* AsiaOne-Suntec *

*****

Hv been there twice since the new Galleria was done up. I got to 'make an effort' to visit that area bcos it was not on the 'main road', and also out of curiosity that I paid it a visit. I do feel that human traffic will improve when the underpass is ready, as it will then divert the traffic there.

So far, I think Raffles City has been very successful with their expansion, and I've definitely visited that place more often now than before.

Hold on and good luck to Suntec tenants.

Fed Slashed Rates Again

Fed cut rates by 0.25%, bringing federal funds rate to 2% and discount rate to 2.25%. This was the 7th time that the central bank had cut rates since Sep 07.

* CNN-Fed *