How much are you earning per annum?

[lazyplane]

Originally Posted by Unregistered

28 & 29
Combined Annual 120k
4Room HDB with 430k loan, bought from hdb at 500k, market value around 600k.
140k in stocks and cash

should i pay off my flat asap? or slowly pay off?

There will be a lot of answers to your loan question, and instead of providing you an answer, i suggest you consider this bigger question ..then it will be clearer for you to answer this loan question.

The bigger question is
1. What will you do with the extra cash at hand if you dont pay down your loans ?
2. And if you are giving the layman answer of "investing", then what kind of return are you confident of achieving in your investment ?

Once you thought this through, it will be easier to make your decision/strategy in the years ahead.

LAI LIAO LAI LIAO.... GOVERNMENT KEEPING COE QUOTA LIAO.... BUY BUY BUY !!

----

BY CHU SINGFAT FOR THE STRAITS TIMES
Latest figures from the Land Transport Authority (LTA) show that the private car population is at its lowest level since 2011, falling to 598,219 as at the end of January.

The shrinkage could continue, with analysts saying it is a sign that the supply of Certificates of Entitlement (COEs) is lagging behind actual replacement demand.

But a larger imbalance is on the horizon and could cause COE prices - which have been trending down - to spike by 2020 unless something is done to smoothen the annual COE supply.

That is because the supply of COEs in categories A, B and E is likely to shrink by 2020, when fewer cars are likely to be scrapped. The number of cars scrapped decides the number of COEs available in the following year.

LTA figures show that at the end of last year, the number of cars aged up to five years ranged from about 22,000 to about 41,000, while those aged six to 10 years ranged from about 68,000 to 114,000.

Thanks to the low COE supply since 2011, cars are being scrapped near the 10-year expiry of their COEs.

This contrasts with the years of bountiful COE quotas between 2004 and 2008, when the typical scrapped car was six to seven years old.

Thus, if most cars continue to be scrapped when their COEs are about to expire, we may expect a feast of COEs in the next five years.

But by 2020, low COE quotas are again likely and a painful consequence is high premiums, which have averaged about $64,000 in category A (and about $75,000 and $76,000 in categories B and E) since 2011.

In comparison, COE pre-miums in those categories averaged between $16,000 and $17,000 between 2004 and 2008.

One way to mitigate the roller-coaster ride in COE pre-miums is to smoothen supply. Back in 2013, anticipating the feast-or-famine cycle in the years ahead, Transport Minister Lui Tuck Yew asked the LTA to find "a practical way of putting aside some of the supply from the peak that we expect in the next few years, for the future when COE supply becomes tighter".

An analysis of COE figures shows that premiums shot up dramatically whenever the bi-monthly supply slipped below about 800, 700 and 500 in categories A, B and E.

One way to reduce volatility is to have at least those amounts of COEs in the three categories in the auctions held twice a month. That would amount to about 48,000 COEs annually.

To ensure this minimum supply from 2020 to 2024, when few cars are expected to be scrapped, COE supply from 2015 to 2019 would have to be adjusted. That would help ensure the car population does not exceed the longterm target of 620,000.

There are several ways to "bank" COEs in years of plenty.

One consists of setting a fixed cap, for example, no more than 72,000 COEs per year across categories A, B and E. Another is to set a variable cap by "banking" a constant fraction - say one-fifth - whenever the annual number of COEs in these categories exceeds 57,600.

These caps were arrived at assuming zero growth in the car population and the 2014 scrapping pattern.

How the caps would work

UNDER the fixed-cap scenario, if the combined annual quota for COEs in categories A, B and E is below 48,000, it will be adjusted upwards to 48,000.

If the combined quota is between 48,000 and 72,000, no adjustment will be made. But above that, the quota of COEs will be capped at 72,000.

This strategy will result in total savings peaking at about 88,000 COEs by 2019, but these will be more or less used up by the end of 2024.

A disadvantage of a fixed cap on COE supply is that in some years, it can lead to a mad rush to buy. For example, about 114,000 cars will reach 10 years in 2016. Supplying only 72,000 COEs then could lead to a scramble for them by owners who want to buy new cars to replace the ones they scrapped.

A variable cap is a way of sharing the "pain" more equally. Based on simulations, it would seem that only about 20 per cent of COEs need to be banked when total annual supply in categories A, B and E exceeds 57,600 between this year and 2019. That will guarantee at least 48,000 COEs in these categories and it will also result in total savings peaking at about 88,000 COEs, which will be more or less disbursed by the end of 2024.

The option of a flat supply of COEs has often been mentioned. It turns out that under the same assumptions as above, the annual flat quota works out to about 59,000 COEs across categories A, B and E from this year.

That, however, would result in total savings peaking at about 143,800 COEs by 2019, implying that only about 77 per cent of the 620,000 target car population will be on the road then. Hence, this option is the least practical.

In the 25-year history of the COE, there have been two roller-coaster cycles in the pre-miums.

Another peak in premiums is expected in about five years and that can be avoided by a bold management of COE supply. The earlier that is implemented, the less painful it will be for all stakeholders.

[email protected]

- See more at: ://.straitstimes.com/news/opinion/more-opinion-stories/story/do-more-smoothen-coe-supply-20150302#sthash.UOIX7zYP.dpuf

Desperate salesman trying very hard to close more deals by tue before wed bidding
We are only at the beginning of COE supply tsunami.
Even if LTA curtailed 40% (industry insiders prediction) of deregistetered cars supply, we will still see 70k number of COEs released in next 12 month. Keep calm and dont buy now. wait for coe price drop to $30k by end of this year. Audi A3 in Dec 2015 will be as cheap as Altis in Feb 2015

Originally Posted by Unregistered

COE prices has reached its lows and will move up back in this week's COE bidding. COE supply will be lesser in the next quarter than last quarter's supply. This is to prevent and boom and bust COE prices which makes everyone unhappy.

If we dont control the COE supply, in 2020, COE prices will shoot up again to possibly more than $100k. Better to regulate the supply over the long term so that Cat A COE prices will be around $65k-$75k and Cat B COE will be around $75k-$85k. This is more equitable to all.

I'm putting my money in a mix of bond and global stock etfs. Hopefully can make 4 or 5 percent per annum.

Does that make sense?

Originally Posted by lazyplane

There will be a lot of answers to your loan question, and instead of providing you an answer, i suggest you consider this bigger question ..then it will be clearer for you to answer this loan question.

The bigger question is
1. What will you do with the extra cash at hand if you dont pay down your loans ?
2. And if you are giving the layman answer of "investing", then what kind of return are you confident of achieving in your investment ?

Once you thought this through, it will be easier to make your decision/strategy in the years ahead.

Don't listen to the idiot who said COE will drop to $30k. COE supply likely to be clawed back or else it will shoot up to possibly $100k and higher in 2020. Read the above analysis. Good to hear professional analysis rather than an idiot's nonsense. Now is the lowest price for COE. It will most likely bounce back much higher at tomorrow's closing. Many people already booked their confirmed COE new cars.

Very good analysis of the COE dynamics.

To avoid the boom and bust of COE prices, COE supply must be clawed back over the next few years to prevent a sudden supply shock in 2020 - 2024, which may cause prices to shoot up to $100k and above. We can expect this clawing back to happen in the next quarter COE supply announcement.

COE prices for Cat A should be about $65k - $75k while Cat B COE will be about $75k - $85k over the long term. This should be the new normal for COE prices. Gone are the days of $40k - $50k COEs.

The current COE prices will likely be the last lows as we can expect prices to bounce back in tomorrow's COE bidding.

Originally Posted by Unregistered

LAI LIAO LAI LIAO.... GOVERNMENT KEEPING COE QUOTA LIAO.... BUY BUY BUY !!

----

BY CHU SINGFAT FOR THE STRAITS TIMES
Latest figures from the Land Transport Authority (LTA) show that the private car population is at its lowest level since 2011, falling to 598,219 as at the end of January.

The shrinkage could continue, with analysts saying it is a sign that the supply of Certificates of Entitlement (COEs) is lagging behind actual replacement demand.

But a larger imbalance is on the horizon and could cause COE prices - which have been trending down - to spike by 2020 unless something is done to smoothen the annual COE supply.

That is because the supply of COEs in categories A, B and E is likely to shrink by 2020, when fewer cars are likely to be scrapped. The number of cars scrapped decides the number of COEs available in the following year.

LTA figures show that at the end of last year, the number of cars aged up to five years ranged from about 22,000 to about 41,000, while those aged six to 10 years ranged from about 68,000 to 114,000.

Thanks to the low COE supply since 2011, cars are being scrapped near the 10-year expiry of their COEs.

This contrasts with the years of bountiful COE quotas between 2004 and 2008, when the typical scrapped car was six to seven years old.

Thus, if most cars continue to be scrapped when their COEs are about to expire, we may expect a feast of COEs in the next five years.

But by 2020, low COE quotas are again likely and a painful consequence is high premiums, which have averaged about $64,000 in category A (and about $75,000 and $76,000 in categories B and E) since 2011.

In comparison, COE pre-miums in those categories averaged between $16,000 and $17,000 between 2004 and 2008.

One way to mitigate the roller-coaster ride in COE pre-miums is to smoothen supply. Back in 2013, anticipating the feast-or-famine cycle in the years ahead, Transport Minister Lui Tuck Yew asked the LTA to find "a practical way of putting aside some of the supply from the peak that we expect in the next few years, for the future when COE supply becomes tighter".

An analysis of COE figures shows that premiums shot up dramatically whenever the bi-monthly supply slipped below about 800, 700 and 500 in categories A, B and E.

One way to reduce volatility is to have at least those amounts of COEs in the three categories in the auctions held twice a month. That would amount to about 48,000 COEs annually.

To ensure this minimum supply from 2020 to 2024, when few cars are expected to be scrapped, COE supply from 2015 to 2019 would have to be adjusted. That would help ensure the car population does not exceed the longterm target of 620,000.

There are several ways to "bank" COEs in years of plenty.

One consists of setting a fixed cap, for example, no more than 72,000 COEs per year across categories A, B and E. Another is to set a variable cap by "banking" a constant fraction - say one-fifth - whenever the annual number of COEs in these categories exceeds 57,600.

These caps were arrived at assuming zero growth in the car population and the 2014 scrapping pattern.

How the caps would work

UNDER the fixed-cap scenario, if the combined annual quota for COEs in categories A, B and E is below 48,000, it will be adjusted upwards to 48,000.

If the combined quota is between 48,000 and 72,000, no adjustment will be made. But above that, the quota of COEs will be capped at 72,000.

This strategy will result in total savings peaking at about 88,000 COEs by 2019, but these will be more or less used up by the end of 2024.

A disadvantage of a fixed cap on COE supply is that in some years, it can lead to a mad rush to buy. For example, about 114,000 cars will reach 10 years in 2016. Supplying only 72,000 COEs then could lead to a scramble for them by owners who want to buy new cars to replace the ones they scrapped.

A variable cap is a way of sharing the "pain" more equally. Based on simulations, it would seem that only about 20 per cent of COEs need to be banked when total annual supply in categories A, B and E exceeds 57,600 between this year and 2019. That will guarantee at least 48,000 COEs in these categories and it will also result in total savings peaking at about 88,000 COEs, which will be more or less disbursed by the end of 2024.

The option of a flat supply of COEs has often been mentioned. It turns out that under the same assumptions as above, the annual flat quota works out to about 59,000 COEs across categories A, B and E from this year.

That, however, would result in total savings peaking at about 143,800 COEs by 2019, implying that only about 77 per cent of the 620,000 target car population will be on the road then. Hence, this option is the least practical.

In the 25-year history of the COE, there have been two roller-coaster cycles in the pre-miums.

Another peak in premiums is expected in about five years and that can be avoided by a bold management of COE supply. The earlier that is implemented, the less painful it will be for all stakeholders.

[email protected]

- See more at: ://.straitstimes.com/news/opinion/more-opinion-stories/story/do-more-smoothen-coe-supply-20150302#sthash.UOIX7zYP.dpuf

Originally Posted by Unregistered

Very good analysis of the COE dynamics.

To avoid the boom and bust of COE prices, COE supply must be clawed back over the next few years to prevent a sudden supply shock in 2020 - 2024, which may cause prices to shoot up to $100k and above. We can expect this clawing back to happen in the next quarter COE supply announcement.

COE prices for Cat A should be about $65k - $75k while Cat B COE will be about $75k - $85k over the long term. This should be the new normal for COE prices. Gone are the days of $40k - $50k COEs.

The current COE prices will likely be the last lows as we can expect prices to bounce back in tomorrow's COE bidding.

Luckily I booked my Altis Classuc @$99k

But question is since it is not guarenteed package, will it be safe to wait for 6 bids?

[lazyplane]

Originally Posted by Unregistered

Very good analysis of the COE dynamics.

To avoid the boom and bust of COE prices, COE supply must be clawed back over the next few years to prevent a sudden supply shock in 2020 - 2024, which may cause prices to shoot up to $100k and above. We can expect this clawing back to happen in the next quarter COE supply announcement.

COE prices for Cat A should be about $65k - $75k while Cat B COE will be about $75k - $85k over the long term. This should be the new normal for COE prices. Gone are the days of $40k - $50k COEs.

The current COE prices will likely be the last lows as we can expect prices to bounce back in tomorrow's COE bidding.

I dont disagree that the reporter has done some analysis.. but i dont agree fully of "banking" the supply of COE or a fixed capped of the supply is good idea.

Both these ideas will just invariably cause the huge number of car owners who will be deregistering their car now to fight very hard for a limited supply and "over allocating" that supply to years where there is no "demand" yet.

As such, banking COE will only benefit "new" car owners (ie those who have no car now but will want one in the future) and penalise the existing car owner that are seeking to replace their car rides. This is not the objective of COE. The end objective of COE is to stablise the total population of cars on the road.

Hence from this perspective , i view that changing the COE supply will just benefit a segment of the consumer rather than achieving its end objective of stabilizing the total population of cars on the road.

Worst-case scenario : COEs price will drop to 30k by end of year if supplies are clawed back by 30%
Best-case scenario : COEs price will drop to 10-15k if no supplies are clawed back

Other factors are rising sibor rate which increase mortgage payment. This reduces middle class families' ability to get car loan due to TDSR. Sibor expected to reach 1.5% by end of 2015, and effective mortgage rate will be around 2.6%. That will be additional $500-600 cashflow payment. Many people will be financially constrained and not get a car. COE price will drop to 30k.

Originally Posted by Unregistered

Don't listen to the idiot who said COE will drop to $30k. COE supply likely to be clawed back or else it will shoot up to possibly $100k and higher in 2020. Read the above analysis. Good to hear professional analysis rather than an idiot's nonsense. Now is the lowest price for COE. It will most likely bounce back much higher at tomorrow's closing. Many people already booked their confirmed COE new cars.

Yes you are safe. On the 5th and 6th bidding, LTA will increase Cat A COE supplies by 40%.
That why BM is taking orders for upcoming huge COE supply.

Originally Posted by Unregistered

Luckily I booked my Altis Classuc @$99k

But question is since it is not guarenteed package, will it be safe to wait for 6 bids?