The smartest investors don't change car unnecessarily, even though they have made lots of money from stock and property markets.

I sold my landed last year and downgraded to a penthouse condo. I used my cash to buy a brand new car. My previous car was 9 years old.

You are a very smart investor. Landed properties prices are falling fast from last year. You sold at the peak. Many landed property owners and developers now facing difficulty selling their landed properties as buyers know prices are still falling. Prices of landed properties will only reach the bottom of the landed property cycle in 2020. Those who own landed properties now are fools and those who cash out of their landed properties last year are the real property gurus.

Well, well ....i guess someone can now be called the smartest investor.
And based on the view, COE price will rise .

Let do a check back by Jun 2015 to see if this smartest investor is right.

Let's analyse objectively:

Supply of COEs is determined by number of cars deregistered and supply growth.

Demand for COEs and new cars is determined by:

1. Number of car owners who deregistered their cars and buying new cars. If 100,000 cars deregistered and all the car owners buying new cars, then supply of COEs will meet demand. No extra supply so COE prices will not drop.

2. Income levels of car buyers and their households. The income level of buyers and household has rise by doubled or more compared to 10 years ago. So a $100k COE today is considered more affordable than a $100k COE ten years ago. So, demand for COEs and new cars is a lot higher today than ten years ago.

3. Number of buyers of new cars and COEs. Ten years ago, we have a smaller population but today we have a bigger, richer population. So, today demand is a lot higher.

4. Wealth of population. Today the wealth of the population has increased by many times. For instance, ten years ago a person may have a net worth of $300k but with the rise in property prices, rise in savings, rise in salaries, the person will now have a net worth of $1m. So, a dual income household could have a net worth of $2m. So, a $100k COE is considered very cheap.

5. Flipping of BTO flats. Many youngsters bought their BTO flat 10 years ago at very low prices. Today when they sell their flat, they can mak profits of $200k - $400k easily. So, with the profits, they can buy a new car.

So, too summarise, while there may be more deregistered cars coming, the owners will want to buy new cars to replace their old cars. So there is no surplus COE. On top of that, there will be new buyers who are richer. Demand will exceed supply of COEs.

The effect will be that COE prices will continue to rise. By 2016, Cat A COE will reach $80k while Cat B COE will reach $100k.

HELLO. Did you just buy a new car, and hope that COE dont drop?

Let's put this as sticky thread and check again 1 year later. You will find that COE will be halved to $50k from your prediction of $100k.

HELLO. You must be desperate to buy a new car.

Yes, let's see whether COE will ever reach $50k. Fat hope.

I find our roads nowadays so congested, it takes a long time to travel from one point to another. We have too many cars and motorbikes on the road, not only by Singapore registered vehicles but also Malaysian registered vehicles. We must ban Malaysian registered motorbikes in Singapore, they should only be allowed to travel by bus. These motorbikes are noisy (many modified engines) and cause a lot of pollution. We need to reduce the number of cars and motorbikes on our roads.

Thank you for sharing your view. Can i check if you have any thoughts and possible counter arguments that may cause the COE to drop ?

Actually, i am really curious to see what happens one year time as i am fortunate that i have some time before making my next car purchase.

The only factor that will cause COE prices to drop is if we have a big global recession leading to 10% unemployment rate in Singapore. As this is not likely to happen, prices will continue to rise higher.

Do you foresee COE stabilizing at $70k (CatB)? or will it shoot back to $100k?