Premiums for certificates of entitlement (COEs) for cars surged to a four-month high yesterday despite an expanded quota.
The premium for cars up to 1,600cc and 130 bhp rose by 1.2 per cent to end at $47,889 despite a 9.3 per cent increase in COE supply for the May-July quota period.
And premiums for cars above 1,600cc or 130bhp rose by 2.8 per cent to close at $51,010 despite a 21 per cent rise in COE supply.
Both premiums are now at their highest since January.
But premiums in the Open category fell 1 per cent to $49,000. These COEs can be used for any vehicle type but end up being used mostly for bigger cars.
Motor traders said buying interest whipped up by the annual Cars @ Expo contributed to the bidding frenzy. The organiser, Singapore Press Holdings, estimated that 1,400 cars were sold at the event two weekends ago.
However, the bids-to-quota ratio yesterday was actually lower at 1.6, compared with 1.7 at the previous tender two weeks ago.
This indicates that even though there were fewer bids, their value was higher - a sign that bidders believed prices would rise. One reason for this is the boom in the private-hire car sector, fuelled by firms such as Uber, Grab and SMRT.
Yesterday, Uber-owned Lion City Rental was successful in all its 90 bids in the Open category with bids of as high as $50,902.
Together with the bids it submitted in the previous two tenders, Lion City has secured close to 900 car COEs - more than 10 per cent of all successful car bids in the last three tenders. That is equivalent to what a leading motor distributorship typically secures.
Mr Neo Nam Heng, chairman of diversified motor group Prime, said COE prices will "head south in the near term". He added: "Demand for private-hire cars is not sustainable. There are just not enough drivers."
Meanwhile, the commercial vehicle COE premium fell 1.6 per cent to a four-month low of $42,302, and the motorcycle premium slid 3.1 per cent to finish at a six-month low of $6,302.