COE Analysis: $50k COEs the new norm?
Singapore -
The big news in the COE market has been the increase in quota, a direct result of the new, three-month quota revision period as announced earlier this year. Because of the increasing number of vehicles that are scraping the 10-year age limit, it’s expected that COE supply will increase accordingly in the months to come.
To sum it up in case you missed out our in-depth analysis from CB222 here it is in summary: “For the new quota period, May to July 2014, the COE supply has been upped by 32 percent overall, and this is reflected in the fact that de-registrations (aka ‘scrapping’) have jumped from 8,758 to 12,073 in the three months preceding each quota period respectively.”
What’s been more strange is the reaction to that behaviour. The COE market is intensely reactive - that is, a rise is usually followed by a drop, or vice versa. But COE prices have been pretty much on the tumble since February this year.
Between June’s first and May’s last COE round, Category A (cars of 1.6-litres or less, and with less than 130bhp) dropped by $2,499, but as mentioned, it’s effectively on the drop from February with some fluctuations aside.
Category B, for cars above 1.6-litres in capacity or with more than 130bhp, has had a more straight forward trajectory - From February it steadily increased until April’s first round, but has since taken dramatic, consistent tumbles - by nearly $10,000 in April, for example.
Category E, the open category for all vehicles plus taxis, had a small increase blip, of just $44.
Industry insiders CarBuyer polled gave a number of different figures, but the general consensus is that COE prices in Cat A and B (they’re both close in terms of price now) won’t dip below $50,000.
