The second Certificate of Entitlement (COE) tender of April 2021 saw an astounding increase across all categories, with the highest Category A, Category B, and Category E bids since the start of the year.
Category A closed at $49,640, a $4,040 increase from the previous round with 1,290 bids received.
Category B closed at $61,190, an $8,881 increase from the previous round with 1,585 bids received.
Category C closed at $44,001, a $7,867 increase from the previous round with 441 bids received.
Category E closed at $62,100, a $9,900 increase from the previous with 633 bids received.
The second April tender showed three categories hitting their newest highs since the start of the year. Category A increased by 8.86%, ending with a price of $49,640. Both Category B and Category E surpassed the $60,000 mark at $61,190 and $62,100 respectively. Percentage-wise, Category C increased by the largest margin, increasing by 21.77% to settle at $44,001.
Future COE Predictions
Earlier this month, the Land Transport Authority announced that it would redistribute 2,890 COEs over May, June and July 2021. These COEs were part of the quotas that were accumulated when bidding exercises were suspended last year from April to June due to COVID-19 pandemic.
With an expected increase in supply, the price hikes across Categories A, B and E could turn out to be a surprise to many. For owners looking to purchase passenger vehicles at lower COE prices, they may have to put their plans on hold. We foresee that the combination of an increased supply and high demand would result in a break-even effect, causing prices to remain around this tender’s steep rise.
Category C prices are expected to stabilise as the market gets more competitive.
“With the hike of COE prices, the number of COEs released in the next three months will shrink,” said Managing Director of Car Search, Mr. Ken Lee. “The government has put in motion that cars in the private-hire sector cannot be on a renewed COE. Hence, many rental companies are stocking up on the latest hybrid models with new COEs should they need to replace cars at the end of their COE cycle. The general public would not be able to gain access to these COEs, which is one of the reasons for the rapid increase in the price of this tender.” he added.
Overwhelmed by the COE prices is Mr. Scord Ho, Director of Gen Y Automobile. “It (the price hike) would affect dealerships when new cars enter the market. COE prices are going to increase or fluctuate around this tender’s current prices. Also, the recent quota released by the Land Transport Authority this April would indeed make it hard for buyers to afford COEs in the future.”
There is a silver lining to this. With COE prices reaching their highest since the start of this year, consumers may be incentivised to switch to electrified or greener vehicles on account of the increased VES rebates, as well as ARF rebates of up to $20,000 for electric vehicles. Additionally, businesses looking to get hold of goods vehicles may be able to do so in the upcoming months, as Category C prices are beginning to dip back to where they were during the previous tenders. As for all other categories, COE prices are expected to rise even further, or remain high in the following tender in May.