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Old 16-04-2015, 05:52 PM
lazyplane lazyplane is offline
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I have read the various posts about COE and at this stage, i am of the view that COE supply will have to outstrip demand eventually.

Fundamentally, COE supply is a lagging market. There must be come a time when there are more allocated COE supply (because the number of cars being scrapped in previous quarter) than demand + car growth need. The only issue is when this will happen ie Q3 2015 or 2016/2017 etc

Predicting what is the COE price when this happen and what is a fundamental economic COE price is a separate topic. Many factors come into price and many of the reasons have been listed .. eg affluence of the families etc etc.

If COE is to go down to $30 k, i think the COE over supply situation must happen, and interest rate must have really spike. Is it possible ? well, i think in today world, never say never.

Another situation is if COE supply situation occurs but interest rate remain low eg below 2% , would COE price come down ? My own view is that this is the most likely situation and we will see COE hovering at $40-70k

Originally Posted by Unregistered View Post
Actually most of the supply comes from replacement supply which means those who scrapped their cars will be back in the market for new cars. This is my take.

If you noticed carefully, the recent biddings for Cat A COE is about 2200. This indicates the demand. So with supply of 1400 +, demand is still a lot higher than supply.

COE prices will continue to rise. Better grab your new car with guaranteed COE as COE will inevitably go higher due to high demand. Demand is driven by higher household income compared to 10 years ago, higher property market price compared to 10 years ago (many profit from BTO flat flipping), higher stock market, social status, families with 2, 3 or 4 cars and many more demand factors driving COE prices higher. Cat A COE at $67k is still cheap since in 2013 it went as high as $90k and I predict it will go to that level again.
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