COE Prices Drop Across All Categories

The Certificate of Entitlement (COE) prices for November 2024 have seen a notable dip across all categories in the first bidding exercise of the month. This marks the second consecutive decrease in premiums, signaling a shift in the market after a period of steady increases. As the COE premiums soften, the motor industry in Singapore has begun to assess the implications of this downward trend, especially in light of recent government announcements and changing market demand.

Category A, which includes cars up to 1600cc and electric vehicles (EVs) with up to 110kW, saw its COE premium fall by $3,011, closing at $99,889. This represents a significant shift from the $102,900 seen in the previous bidding round. The number of bids for Category A decreased by 10.7%, reflecting a decrease in demand, possibly due to the higher premiums in the past few months. While the lower price might seem appealing to some, many prospective buyers are still cautious, considering the premium to be too high for certain vehicle categories.

Category C, which covers goods vehicles and buses, saw the steepest decline in premiums, with the price falling by $4,599 to close at $68,340. This drop of 6.3% from the previous bidding round reflects a reduction in demand for commercial vehicles, which might be tied to the economic slowdown in the region. Similarly, Category D, which covers motorcycles, experienced a 5.2% reduction, closing at $9,089. This price decrease follows a general trend seen across the COE categories, but the market for motorcycles is not expected to experience drastic fluctuations in the near future.

For Category E, which is the open category that allows for any type of vehicle other than motorcycles, the premium fell by $5,700, closing at $109,000. While Category E premiums are typically associated with larger, more powerful cars, the latest dip continues the trend of declining prices seen across all categories.

Several industry experts believe that the decrease in COE premiums is partly due to the announcement of additional COEs by the Land Transport Authority (LTA). With 20,000 additional COEs to be made available over the next few years, the supply increase has led to a cooling of demand, particularly for smaller and less powerful vehicles in Category A. Dealers such as Ng Choon Wee, commercial director of Komoco Motors, predict that many potential buyers may continue to wait and observe market trends before committing to a purchase, as prices in Category A are still considered relatively high.

The November 2024 COE bidding results suggest a market that is recalibrating after the recent surge in prices. While the market has shown signs of cooling, experts caution that the lower premiums may not lead to an immediate surge in demand. As the final bidding exercise of the year approaches, the industry will be closely watching to see if the trend of lower premiums continues or if prices begin to rise again.