In Singapore, COE prices have recently surged to record highs, stirring concerns and debates about car ownership accessibility and their broader impact on the nation’s transportation and urban development.
The recent October bidding for COE saw Category A hit $106,000 and Category B hit $150,001.
These mark a new high for both categories.
Who is driving our COE?
In a recent parliament discussion, questions were raised about the sky-high COE and what is causing it.
The Land Transport Authority of Singapore published a series of infographics explaining the FAQs on the COE situation.
Foreigners
While some people speculated that foreigners were driving up prices with their purchases of Rolls-Royces and Ferraris, it turned out not to be the case as foreigners only secured 1% of Cat A COEs and 4% of Cat B COEs.
The biggest driver of COE demand was still Singapore residents.
Multiple Cars Household
The percentage of multiple car-owning households has been decreasing. The percentage dropped from 19% in 2012 to less than 15% in 2023.
Car Leasing Companies
Car leasing companies secured about 21% of Cat A COEs and 23% of Cat B COEs from February to October 2023.
It was lower than the 27% and 24% of the respective category in 2022.
LTA observed the data and commented that COE prices have gone up in a period where demand from car leasing companies has come down.
What is the Government doing to stabilise the COE market?
The number of COEs available is based on the number of deregistered vehicles.
LTA has revised the COE quota computation method to the moving average of deregistration in four preceding quarters instead of only the preceding quarter.
Simply, they take into account the number of cars that will be deregistered in the upcoming 12 months instead of the upcoming 3 months to compute how many COEs will be available for bidding.
LTA has mentioned that they have also brought forward quotas from the peak years to fill the current low supply of COEs.
The COE quota for Categories A, B and C will continue to increase in 2024 before hitting the peak supply period in 2025.
Will COE drop?
With potentially much more COE to be available in the coming years, will COE prices start to drop from the current high?
