SINGAPORE: Minister for Transport S Iswaran tackled the hot-button issue of the price of the Certificate of Entitlement (COE) in Parliament on Monday (May 8), addressing the questions MPs had raised about the certificate needed to own and use cars in Singapore.
One of the questions concerned the impact of foreigners on COE prices. Mr Iswaran said the proportion of car COEs obtained by foreigners has remained low and has not changed much over the years. From July 2020 to December 2022, less than 3 per cent of car COEs, on average, were obtained by foreigners.
The minister said the proportion of households owning more than one car has also remained stable. He added that the numbers he quoted in Parliament in October last year have remained unchanged. Of the 471,000 households that own cars, 12 per cent have two cars, and under 3 per cent have three or more cars.
He then went on to explain why COE prices have been going up.
“Fundamentally, the COE prices reflect demand for a limited supply of COEs. This is further accentuated, or exacerbated by the fact that we are now at the trough in the 10-year cycle of COE supply. Demand in all categories has remained resilient, especially as the economy recovers post-Covid-19.
“Incomes have also been rising over the long term. As was observed in Professor Raymond Ong’s article in The Straits Times on May 7, the ratio of COE price to median monthly household income has fallen from 11 to 1 during the previous COE price peak in 2013 to 9 to 1 today in comparison to median income, the COE price is actually lower even though the absolute price is higher, because household income has risen.”
However, the minister warned that with rising household incomes and the Government’s policy of zero-growth car population, “we must expect the long-term trajectory for COE prices to be upwards”.