Singapore increases COE quota for categories A and B cars to reduce supply volatility

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Singapore’s Land Transport Authority (LTA) has announced that it will increase the Certificates of Entitlement (COE) quota for cars in categories A and B as a one-time adjustment to reduce supply volatility. The quota will rise from 9,575 to 10,431 for the current quarter, with Category A increasing by 24% and Category B increasing by 15%. The LTA will redistribute about 6,000 COEs gradually in the upcoming bidding exercises. This move follows recent record highs in COE premiums; however, analysts predict that COE prices will remain high while supply is limited and demand strong.

In a ministerial statement, Singapore’s Transport Minister, S Iswaran, said the long-term trajectory for COE prices would be upward due to rising household incomes and zero growth in the car population policy. He emphasised that the one-time adjustment would help lessen supply volatility but would not eliminate it.

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The LTA reiterated that the new measure would not change the zero Vehicle Growth Rate on the overall car population. It identified the specific vehicles in the vehicle registry with five-year non-extendable COEs, and when these vehicles are deregistered in the future, their quota will not return to the bidding pool, reports Channel News Asia.

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