LTA to adjust COE quota calculation again to reduce supply volatility
The COE supply for February to April will go up by 3.4 per cent from the previous quarter.
SINGAPORE: The Land Transport Authority (LTA) announced on Friday (Jan 20) that it would be adjusting the method for computing Certificate of Entitlement (COE) quota available for bidding.
The new method will yield 309 more COEs for the upcoming February to April period, a 3.4 per cent increase from the previous quarter.
The adjustment - six months after a similar move last year - is to "further reduce the quarter-on-quarter volatility of COE supply", said LTA.
With effect from Feb 1, the number of COEs available for bidding in each quarter will be the rolling average of the number of vehicles deregistered over the previous four quarters, instead of two.
For example, the number of COEs for the upcoming quarter of February to April will be 25 per cent of the number of vehicles deregistered from January 2022 to December 2022.
The number of COEs for the next quarter - May to July - will be 25 per cent of the number of vehicles deregistered from April 2022 to March 2023.
The start of each new COE quota bidding period will continue to be one month after the close of each calendar quarter.
COE QUOTA FOR FEBRUARY TO APRIL
The COE quota for February to April will be 9,437. This is a 3.4 per cent increase from the 9,128 COEs in the previous quarter.
Bidding under the upcoming quota will start on Feb 6, said LTA .
Under the previous method, the quota for the February to April period would have been a lower figure of 8,695, a difference of 7.9 per cent or 742 COEs.
The next quota announcement for the bidding period of May to July will be made in April.
After the adjustment in calculation method last year, experts told CNA that COE price peaks would not be as high as they would be under the current counting method.
However, COE price troughs will also not be as low as they would have been.
Prices would still likely increase, but at a smaller extent compared to the current rules. Together, these reduce the volatility of COE prices.
At the time, the experts suggested that the new counting method had probably been introduced due to concerns over random fluctuations in available COEs and the knee-jerk reactions from bidders.