COE premiums fell across the board in the first tender exercise of 2022, amid cautious sentiment following a 2021 marked with highs
2022’s first Certificate of Entitlement (COE) bidding exercise saw premiums dip pretty much across the board, with all categories except for the one for motorcycles seeing prices drop, a reversal of the trend of the final few months of 2021 which saw premiums reach new heights.
In Category A, for ‘mainstream’ cars with engines less than 1.6-litres in capacity and output of less than 130hp, prices went down by S$1,202, to end at S$57,599. Meanwhile, Category B, for cars with engines that make more than 130hp, or are above 1.6-litres in capacity, saw an even bigger dip, with prices falling by S$3,289 to end at S$77,700.
Category E meanwhile, which is open to all vehicles except motorbikes, but usually ends up being used for big cars, saw a small decrease in premiums as well, with prices falling by S$1,388 to end at S$82,501. This marks the fourth consecutive exercise in which Cat E premiums have fallen, having peaked at S$88,000 in early November.
Market players put the dip down to the ‘New Year effect’, with most dealers having concluded their year end rush to meet sales targets, and therefore holding off in the new year. Many are also heading into the new year in a cautious state, with the highs of the preceding months seeming to have finally have an effect on consumer sentiment scared off by the prospect of ever-spiralling premiums.
A number of observers noted that early January is generally a quiet month for sales, with most buyers having either already made their purchases before Christmas, or waiting to commit before Chinese New Year. However, the dip in premiums may entice consumers to come back in again, and possibly push premiums up once more in the next exercise, especially since Chinese New Year falls on early February this year.
The Land Transport Authority (LTA) is also scheduled to announce the COE quota for February to April some time later this month, and observers note that many dealers are holding off until the announcement, before subsequently charting out their next steps. The quota is unlikely to be a drastic deviation from the current situation however, which would likely mean that COE premiums are expected to remain at current levels, more or less, for the next few months ahead at least.
CarBuyer’s print edition is now an all-new, shiny digital edition with interactive content, embedded videos and more – subscribe now!