Govt studying measures to cool COE market

SINGAPORE: More Certificates of Entitlement (COEs) may be made available in the coming months.

The Land Transport Authority (LTA) is studying measures that may contribute to higher COE supply for the next six-month period from this August.

Transport Minister Lui Tuck Yew revealed this on the sidelines of the groundbreaking ceremony of Tuas West Extension on Friday.

Car buyers have been feeling the heat in recent months, as prices have soared due to supply tightening.

The latest bidding round alone saw COE prices reaching record levels.

Prices for big cars went past the S$90,000 mark, while those for smaller cars breached the S$60,000 mark.

But there may soon be some relief.

Minister Lui said he has asked the LTA to study two measures.

One is to possibly delay cutting the vehicle growth rate to 0.5 per cent from the current 1.5 per cent by August this year.

"I think if we proceed with the plan as we envisaged earlier, it would be quite a significant squeeze on the vehicle quota numbers. While 0.5 per cent is indeed the target we want to achieve, we will study very carefully whether we can exercise flexibility in this area," said Mr Lui.

Another possibility is to defer the claw-back of COEs which has been underway since April 2010.

The claw-back is to counter an oversupply of COEs due to over-projections in vehicle deregistrations between 2008 and 2009.

Industry players said if the measures are implemented, higher quota numbers will cool the COE market. But they do not expect the reduction in COE prices to be very significant.

Michael Wong, vice president of Motor Traders Association, said: "If these deferred adjustments had been much earlier, then of course the numbers would be quite significant.

"We are at the last phase of the claw-back. The total number is still good-sized, but on its own will not significantly impact the total volume of COEs available."

Still, some potential car buyers hope the measures will be implemented.

"The move is good, (it will) enable more people to buy cars," said a member of the public.

Others felt boosting the COE supply would not be sustainable.

"Singapore is too small a country to have many vehicles. Improve our public transport (and) make sure that it is good quality," said another.

LTA is expected to complete its study on the possible measures by the end of the month.

Car COEs dip in Jan 1st bidding

SINGAPORE - Certificates of entitlement saw a fall in prices for most categories at the end of the first bidding exercise of the year at 4pm today.

Premiums for Cat A (cars 1,600cc and below and taxis) were on a downward trend, dipping for the fourth bidding exercise in a row.

It closed $46,889, a 6.2 per cent drop compared to the last bidding in December 2011.

Cat B (cars above 1,600cc) COE premiums fell by a similar margin. It dropped six per cent to end at $65,801.


The open category dipped by a slightly bigger margin of 7.5 per cent to close at $65,700.

COEs for commercial vehicles ended lower at $38,699.

However motorcycle premiums rose by 14 per cent to $1,689.

COE PREMIUMS TO RISE

Most distributors are expecting COE premiums to rise in 2012 because of a smaller quota.

Based on the current rate of deregistered vehicles, the number of Cat B COEs is expected to fall from about 353 per tender to 325 between February and July next year, a recent Business Times report said.

The new vehicle population quota that will kick in from August to January 2013, the second half of the quota year, will reduce that number even further: to 250 per bid.

However the situation could be different for small cars. The first half of the quota year -- February to July -- will see an increase from 550 COEs per bid to 600, the report said. The number will then fall from 600 to 455, based on the current scrappage.

COE prices for cars fall

Premiums for certificates of entitlement (COEs) for cars fell at the end of Wednesday's open bidding exercise.

Prices for small cars (1,600cc and below, and taxis) dipped to $52,392 from $54,887 in the last bidding in November, a 4.5 per cent drop.

The open category, usually used for cars, also saw a two per cent dip to $75,889 from $74,340.

The biggest drop was reserved for the big car category (above 1,600cc). Prices fell 6.5 per cent to $72,350.


Commercial vehicle premiums slided marginally to $40,189 from $40,009.

Motorcycle premiums did not move much at $1,902 from $1,889, a 0.7 per cent change.