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Fewer COEs next quarter, but more for cars

There will be 3,777 Certificates of Entitlement for bidding each month, down from the previous quarter's 4,019, LTA said.

SINGAPORE: The Certificate of Entitlement (COE) quota for the period August to October this year will be 11,331, the Land Transport Authority (LTA) announced on Wednesday (July 16). This means the monthly quota of COEs will be 3,777 for the period, down from 4,019 in the previous quarter.

However, the number of COEs available for cars has increased, while a drop in the monthly quota of COEs for commercial vehicles and motorcycles was also seen.

The monthly quota for Category A cars (up to 1,600cc and 130bp) has risen to 1,143 from 1,011 in the previous quarter, while the quota for Category B cars (above 1,600cc or 130bhp) is now 1,010, up from 966 in the previous quarter.

For the open category, which can be used for any vehicle type but ends up mainly for bigger cars, the monthly COE supply will be 478, down from the previous quarter’s 586. Goods vehicles and buses will have a monthly supply of 515, down from 770, and motorcycles will have 631, down from 686.

Analysts say more Catergory A COEs could come on stream over the next few months, as more of the current Catergory A COEs expire. But they say prices are not likely to fall much.

"I see an overall long-term gradual downward movement in the COE prices, but it is very, very unlikely we will get back to the good old days, where the COE was at a very low price and affordable. I think those days are gone," said Dr Park Byun Joon, the Head of Urban Transport Management at SIM University. "But definitely, we are not going to go back to the situation where we are worrying about whether COE will hit S$100,000. Those days are also gone too."

In the latest bidding exercise which ended last Wednesday, premiums for Categories A and B were within the same range - at over S$60,000. But moving forward, industry players say there could be a widening price difference between the two.

"I believe the Category A buyers are more sensitive to the overall price. They would not be in a hurry to chase up the price, whereas those in Category B are more sensitive to the timing and they'll be more in a hurry to get the vehicles," said Glenn Tan, President of the Motor Traders Association of Singapore. "So I believe that would also create a price gap between the two. And also I believe with the current financing curbs, it actually helps to keep the price in check."

It has been six months since LTA shortened the COE quota period from six months to three months, with the aim of having a more accurate matching of the number of new COEs issued to replace de-registered vehicles. Experts and industry players say having a quarterly quota makes the system a more responsive one, but they added that it is still early days yet and it will take about a year or two before COE prices stabilise.

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