SINGAPORE - There will be more certificates of entitlement (COEs) in the coming months which should, in turn, drive prices further south.
The Land Transport Authority announced on Friday (April 15) that there will be on average 9,634 COEs a month from May to July, a 15 per cent increase from the previous three-month quota period.
Car COEs will rise by 14 per cent to 8,384 a month (including Open, which is almost exclusively used for registering bigger cars). The big car COE supply will rise by 21 per cent, while the small car quota goes up by 9.3 per cent.
Overall, the single biggest expansion will be in the commercial vehicle category. It goes up by 40.7 per cent to 456 pieces a month.
Motorcyclists will see an 11.4 per cent increase in their supply, to 794 COEs a month.
That the COE supply would grow is no surprise. The trend, fuelled by the scrapping of old vehicles bought during the last supply bonanza about 10 years ago, is expected to continue for another 18 months or so.
But the quantum of the latest increase was somewhat of a surprise.
Mr Ron Lim, general manager of Nissan agent Tan Chong Motors, said: "The numbers look much higher than expected. March deregistrations must have been very high."
Indeed, according to data just released by the LTA, 13,580 vehicles were scrapped in March - 46 per cent more than the average of the preceding two months.
The figure would have been even bigger if not for a small wave of COE extensions. Around 10 per cent of expiring COEs are extended, when vehicle owners pay the so-called prevailing quota premium - a moving average of COE prices over the previous three months.
COE SUPPLY FROM MAY TO JULY 2016
|AVERAGE MONTHLY QUOTA||% CHANGE|
|CARS UP TO 1,600CC AND 130BHP||4,433||+9.3|
|CARS ABOVE 1,600CC OR 130BHP||2,924||+21|
SOURCE: LAND TRANSPORT AUTHORITY SINGAPORE