SINGAPORE - Certificate of entitlement (COE) prices ended higher across the board at the latest tender on Thursday (July 22) to post its first rebound after two rounds of falls.
The COE price for cars up to 1,600cc and 130bhp finished 4.5 per cent higher, at $47,010. The premium for cars above 1,600cc or 130bhp closed 6.1 per cent higher, at $59,501.
The price of Open COEs, which can be used for any vehicle type except motorcycles but which end up mostly for bigger cars, ended 4 per cent higher at $60,001.
Motor traders said buyers drawn back to showrooms by the drop in prices in the previous two tenders contributed to the revival.
They added that an imminent shrinkage in COE supply starting next month had also fuelled more aggressive bidding by car dealers.
Commercial vehicles, which will see the sharpest contraction in COE supply, chalked a relatively modest increase in price of 1.6 per cent to $39,523. Motorcycle premium closed 2.2 per cent higher at $8,689.
The Land Transport Authority announced last week that there would be 6.6 per cent fewer COEs for cars (including for the Open category) between August and October. Commercial vehicle and motorcycle COE supplies however, will each contract by around 27 per cent.
This was largely because COEs held over from the three-month circuit breaker trade suspension period in April to June 2020 have already been distributed in the current quota period.
In response to a query from The Straits Times, the LTA said around 80 per cent of COEs revalidated for five years in 2016 have been recycled as at end-June.
Mr Neo Nam Heng, chairman of diversified motor group Prime, is optimistic that COE supply will increase in the November-January quota period.
Commenting on the latest results, Mr Neo said: "The market reacted to the cut in quota. But thankfully, commercial vehicle premium went up only slightly, which shows that consumers are not willing to pay when prices are too high.
"Overall, the rise in prices is not substantial."
He added that 20 per cent of car COEs revalidated for five years in 2016 that are yet to be distributed worked out to be around 4,500 pieces.