Singapore has seen a notable increase in the number of resident households owning cars, rising from 459,000 in 2012 to 472,000 in 2022, according to recent data revealed by Acting Minister for Transport, Chee Hong Tat.
This news comes amidst ongoing discussions about certificate of entitlement (COE) prices and the evolving landscape of private-hire cars in the country.
Minister Chee clarified that, while the percentage of car-owning resident households has decreased from around 40% in 2012 to approximately 34% in 2022, this is due to the overall growth in the number of resident households over the past decade.
The total number of resident households expanded from 1.15 million in 2012 to 1.4 million in 2022.
Chart Provided by Acting Minister for Transport, Chee Hong Tat / Facebook
Changing Perspectives and Impact on Car Ownership
One of the contributing factors to the increase in car ownership could be attributed to the changing perspectives on transportation needs post-pandemic.
With travel becoming increasingly essential and convenient, more households might be recognising the value of owning a car.
The flexibility and safety associated with personal vehicle use could be particularly appealing in the current global climate.
Private-Hire Cars and COE Demand
Moreover, the rise in private-hire cars has played a role in the demand for COEs.
Car-leasing firms secured approximately 21% of Category A COE quota and 23% of Category B quota in the first three quarters of 2023, registering these vehicles as private-hire cars.
Category A includes smaller, less powerful cars and electric vehicles, while Category B encompasses larger, more powerful cars and EVs.
Despite the impact of private-hire cars on COE demand, Mr Chee emphasized that local individual buyers remain the primary contributors to this demand.
Discussions about the potential creation of a separate COE category for private-hire cars are ongoing, with considerations for trade-offs such as reallocating quota from existing Categories A and B to accommodate the new category.
The Minister highlighted the challenges associated with determining the exact quota for private-hire cars, as demand for these vehicles evolves from quarter to quarter.
Striking the right balance is crucial to prevent shortages and price hikes in existing categories, while ensuring an adequate supply for private-hire drivers and commuters.
Future Projections and Market Trends
Looking ahead, Mr Chee assured the public of a continued rise in the supply of COEs for cars and commercial vehicles until it peaks in 2026 and 2027.
The authorities plan to bring forward COEs guaranteed to expire in future peak supply years to meet the present supply troughs, aiming to provide potential car buyers with greater assurance and stabilize the market.
In the latest COE tender exercise ending on November 8, prices across all five categories experienced a decline, breaking the record-breaking streak of high premiums in Category B and the Open category, predominantly for larger cars.
This development suggests a potential shift in the COE market, which will be closely monitored as authorities work towards ensuring a sustainable and balanced transportation landscape in Singapore.
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