The volume and timing of the allocation of these additional COEs are still unknown. SINGAPORE – The impending injection of up to 20,000 additional certificates of entitlement (COEs) over the next few years may cause potential car buyers to stay on the sidelines while they anticipate the supply of COEs to grow. But while buyer demand could weaken in the short term as a result, it is unclear what impact the injection would have on COE premiums in the long term.
This is especially with the timing and volume of allocations of the additional COEs not known, said motor traders and analysts. Associate Professor Walter Theseira, a transport economist at the Singapore University of Social Sciences, noted that the goal of the injection is to stabilise the supply of COEs, by preventing any sudden reductions or increases, over the next few years. He said this could then stabilise and moderate prices, giving potential car buyers more assurance that vehicles can be purchased at reasonably affordable prices.
As a larger number of cars are due for deregistration towards the end of this decade, Prof Theseira suggested that it would be logical to add more COEs to the pool as soon as possible instead of waiting till there is a surge in the supply in the later half of the 2020s. He noted that the progressive injection of 20,000 COEs should reduce price volatility, which is generated by significant differences in the supply of COEs between peak supply years and supply troughs. “This is not ab.
