The certificate of entitlement (COE) market has not crashed despite this not being a usual cycle, given the three-month suspension on COE bidding during the Covid-19 pandemic, said Transport Minister Khaw Boon Wan yesterday.
"I am relieved that the COE market did not crash, as that would cause a lot of misery to second-hand dealers and existing car owners who may need to sell their cars," he said in a Facebook post .
Bids for COEs saw a significant spike in the motorcycle category - from $4,489 to $7,702 - despite a 50 per cent increase in quota.
This comes after COE bidding exercises were resumed in phase two of Singapore's reopening, with the first one held on Monday. The COE quota for the bidding exercises in July is 8,737.
Mr Khaw expects the spike in motorcycle COE bids to "peter out", noting that the $7,702 bid was below the historical high of $8,451 in February 2018.
The Covid-19 circuit breaker, he noted, had resulted in a suspension of COE bidding because motor dealerships and showrooms were closed.
With their reopening, the Land Transport Authority (LTA) had to distribute the COE quota fairly, while taking into account that there would be some "pent-up demand" arising from the three-month suspension of COE bidding.
"COE bidding is market-driven and it is hard to predict exactly how much demand there will be, especially under such unusual circumstances," Mr Khaw said.
The LTA will continue to analyse the bids and monitor the situation.