Prevailing conditions such as the tight supply for COEs and relatively elastic demand for bigger and luxury cars could see prices for those vehicular categories continue to climb, or at least hover around present levels for the foreseeable future, they told TODAY. models of up to 110kW to Category A, as well as Singapore’s economic recovery, could also nudge up COE prices.for vehicles in the open category, which is for any type of vehicles.
Assistant Professor Terence Fan from Singapore Management University , a transport analyst, told TODAY on Friday: “Back in the 1990s, the economy was booming, and real estate prices broadly rose – creating a potential wealth effect that exacerbated the effects of a booming economy.”That month, the premium for vehicles in the open category came in at S$97,889. Premium for Category B cars reached S$96,210. COE prices for smaller cars, too, breached the S$90,000 that month, at S$92,100.
Associate Professor Walter Theseira, an economist at the Singapore University of Social Sciences, said that people generally hold onto COEs until the certificates expire after 10 years, unless COE prices fall by enough that"the paper value, the refund they get from scrapping it" makes it worthwhile to deregister earlier.STRONG DEMAND FOR LUXURY CARSThe Category A premium has grown from S$45,600 in the first bidding of April last year to S$72,996 on Wednesday, a 60 per cent jump.
This however, may change as the Government will be adjusting the Maximum Power Output threshold for electric cars for Category A fromMr Tang said that some may even rush to put in bids for the second exercise in two weeks time before the EV policy change takes effect.for Category A cars, Mr Wong said.
“You add it all up, it's basically demand growth in exactly the population who can afford cars and who can afford to pay high premiums for cars,” he said.Experts and players, however, had varying views on how long the premium rally will last.