In the first bidding exercise following the increased quota for cars in Categories A and B, Certificate of Entitlement (COE) premiums exhibited mixed results on Wednesday.
While premiums for Category A experienced a significant decline, Category B witnessed a more modest drop. Open category COEs reached a new record high, while commercial vehicle COEs saw a slight increase. Motorcycle premiums, on the other hand, doubled compared to the previous tender.
Premiums for Category A, designated for smaller cars, concluded at S$92,000, marking an 8.9 per cent decrease from the previous tender’s price of S$101,001.
For Category B, which encompasses larger and more powerful vehicles, premiums fell to S$113,034, reflecting a 5.3 per cent decline from S$119,399 in the preceding bidding exercise.
Open category COEs, which can be used for any vehicle type but are primarily utilized for large cars, reached a new peak at S$125,000, surpassing the previous record of S$124,501 established on April 19.
COEs for commercial vehicles, including goods vehicles and buses, rose marginally to S$77,501, up from S$75,589 in the previous bidding exercise.
Motorcycle premiums closed at S$10,602, representing a significant increase compared to the closing price of approximately S$5,000 in the last tender. The previous round saw a sharp decline in motorcycle prices due to new measures requiring higher bid deposits and shorter validity periods for motorcycle temporary COEs.
The Land Transport Authority (LTA) received a total of 3,536 bids during the latest exercise, with a quota of 1,844 COEs available.
Earlier this month, it was announced that the COE quota for cars in Categories A and B would be increased over the next few quarters.
This adjustment aims to reduce supply volatility. For the current quarter spanning May to July, the COE supply will rise by 24 per cent for Category A and 15 per cent for Category B.
These additional COEs will be sourced from a pool of guaranteed deregistrations of five-year COEs that would have expired during periods of higher supply. The LTA has decided to bring them forward and distribute them over the coming quarters.
The adjustment comes as COE prices have soared, with car premiums recently surpassing the S$100,000 threshold.
Transport Minister S Iswaran cautioned in parliament on 8 May that as household incomes continue to rise and Singapore maintains a policy of zero-growth in the car population, citizens should anticipate a long-term upward trajectory for COE prices.