CNA – With Singapore’s policy of zero-growth in the car population and as household incomes rise, Certificates of Entitlement (COE) premiums are expected to trend upwards, said Singaporean Transport Minister S Iswaran in Singapore’s Parliament yesterday.
“Fundamentally, the COE prices reflect demand for a limited and falling supply of COEs,” Iswaran said in a ministerial statement responding to parliamentary questions on the COE system.
He noted that demand for vehicles has remained “resilient”, especially as the economy recovers after COVID-19.
Incomes have also been rising over the long term, and the ratio of COE price to median monthly household income has fallen. “As household incomes continue to rise in the coming years, coupled with our policy of zero-growth in the car population, we must expect the long-term trajectory for COE prices to be upwards,” said Iswaran.
Even as he announced new measures to raise the COE quota for cars in categories A and B over the next few quarters, Iswaran stressed that mass public transport is at the core of Singapore’s transport strategy and the country is moving towards a “car-lite” future.
“As we seek to improve the efficiency of the COE system with these measures that we have already undertaken over the years, we should not lose sight of our goal of becoming a car-lite society with accessible and inclusive transport.”
Ten Members of Parliament (MP) had asked more than 20 questions about rising COE premiums, which have hit record highs in recent bidding exercises. Category A premiums for smaller cars, for instance, surpassed SGD100,000 in April.
A number of MPs asked about the reasons behind the rise in COE prices and the impact of demand from private hire companies.
MPs asked if a cap can be imposed on the number of private hire cars, and if foreigners or households with multiple vehicles have driven up demand for cars. MPs were also concerned that those who need cars, such as households with children and the elderly, as well as people who rely on cars for their livelihood, will be priced out.
Responding to the questions on COEs for private hire cars, Iswaran said that for the last four years, the number of private hire cars has remained at about 10 per cent of the total car population and has averaged around 70,000 since 2019.
“While COE prices have been rising over the past several quarters, demand from PHC companies has in fact been moderating,” said Iswaran.