Certificate of entitlement (COE) prices ended mostly higher at the latest tender yesterday, with bidding fuelled by a number of factors, including a foreseeable cut in the COE quota from next month.
COE premiums for cars up to 1,600cc and 130bhp closed at $45,600, 2.3 per cent higher than three weeks ago. COE prices for cars above 1,600cc or 130bhp climbed 11.3 per cent to breach the $50,000 mark and ended at $52,309.
Both car premiums are now at their highest levels since late-2017.
Prices of the Open COE, which can be used for any vehicle type except motorcycles but which ends up mostly for bigger cars, rose by 9.2 per cent to finish at a two-year high of $52,200.
Commercial vehicle COE prices bucked the trend by closing at $36,134, or 8.7 per cent lower.
The motorcycle premium finished 2.7 per cent higher at $8,000, a three-year high.
Motor traders said an increased wealth factor arising from bullish equity and property markets had contributed to the demand for cars.
"I've been seeing more foreigners in the showroom too," said Mr Neo Nam Heng, chairman of diversified motor group Prime, who noted that the increase was more pronounced for bigger cars, which are discretionary purchases.
"Cat A is still relatively weak," he added, referring to the COE category for cars up to 1,600cc, which rose by a somewhat modest 2.3 per cent.
A slew of new model launches from Mercedes-Benz and BMW - including the new S-class limousine and M3 sports sedan - also contributed to demand. Toyota, with the revamped Lexus LS and LC Convertible, has also seen brisk sales.
But Mr Neo said an expected COE supply reduction - on the back of fewer deregistrations - was probably the biggest factor. "Cat B will see the biggest cut," he said.
He said the drop in commercial vehicle COE category was "a disappointment", as he expected a reduction which would offset the $10,000 tax surcharge for diesel vans, trucks and buses, which has just kicked in.
New emission penalties starting in July for bigger, more pollutive cars are also seen to be prompting well-heeled consumers to rush to buy sooner rather than later. Ironically, yesterday's COE price rise for such cars has exceeded the $5,000 tax surcharge starting on July 1.
Mr Nicholas Wong, general manager of Honda agent Kah Motor, said although the new penalties are a few months away, dealers are managing their risks in the face of the demand spike. Category B bids have risen by 25 per cent, he pointed out.
Meanwhile, newcomer Tesla Singapore, which aims to register its first cars in July, is expected to add to overall demand in the coming months.
Mr Neo anticipates that premiums will ease only towards the last quarter, when COE supply will be bolstered by deregistrations of cars which had five-year COE extensions in 2016.