2015 May, 2nd COE Bidding Exercise

[7hm]

Of course, there will always be a group with inelastic demand curve who disregard price movements anyway and be in the market anytime they 'feel' they can afford it.

 

If you ask me, I will use the word 'want' to afford it

[Hmsg]

Cat A will stay around same range +/- $1k.

[kingfisher1688]

Cat A will stay around same range +/- $1k.

guess so as the pent up demand is just too strong.

 

Ultimately it is still zero car population growth

[Enye]

 

Right now, everyone is thirsty because they have been living in drought conditions for the past 5 years. This is only human psychology. The market has to be so satiated with COEs that they begin to tire of the process of changing cars. This last happened 8-10 years ago.

 

For COE prices to soften, a gradual and gentle downward trend will have to be seen over a few bidding cycles before human psychology kicks in and 'tells' the mind that the 'correct/ rational' course of action will be to hold off and see if it would go down even more.

 

Only when people (i.e. the market) sees this phenomenon happening will they back off because they 'feel' that the next round would be even cheaper and thus back off from jumping in like lemmings into the ocean (as is the case now. Of course, there will always be a group with inelastic demand curve who disregard price movements anyway and be in the market anytime they 'feel' they can afford it.

 

But these are just my musings, only time will tell if COE will soften.

The market is full of owners holding on to 8 to 10 year old cars and you expect rationality in new car buyers' psychology?

 

😄

[Erykool]

For me, as long as we see the number of bids way way exceed the number of Coe available. Dun need to talk so much. The price of Coe will stay ard the same or go up. So far it's true. Will only see a significant drop only if like in early part of the year where the number of bids equals or close to the number of Coe available..

[Sweeney]

I'm one of them... gonna go all the way to very last day.

 

The market is full of owners holding on to 8 to 10 year old cars and you expect rationality in new car buyers' psychology?

😄

 

[Dgeralds]

I think COE may never go down. I see a lot of demand and many are cash rich. Recently met a group with 2 new citizens. Both said yes the cars in Singapore is very expensive but affordable! I believe the household income for each of these families is easily 15K..

[Latio2005A]

For me, as long as we see the number of bids way way exceed the number of Coe available. Dun need to talk so much. The price of Coe will stay ard the same or go up. So far it's true. Will only see a significant drop only if like in early part of the year where the number of bids equals or close to the number of Coe available..

I am wondering which bidding had we seen the number of bidders going below the quota, save the few rounds of freak results of $1 when bidder exceeded quote allocated?

[Limwsv]

Time for me to appear again.

 

Econ 101 : Why is it so difficult to grasp that the demand is always there, the curve will extend all the way until the price of COE is zero.

 

 

Of course the demand will always match the supply per auction unless of a black swan event which prevents bidders from entering the market.

 

The key thing is that each preceding price group must be satiated first before the price can fall.

So, those who can afford 65K COE must all buy first before those who can afford 55K COE. Then COE will fall to 55K so that group can start buying.

 

Since there no statistics release on household wealth, as oppose to income which data is available. We can only use income as a gauge of wealth and willingness to pay.

 

This chart shows that trend and the purchasing power of each income band.

 

So, you know your household income, my chart will tell you what are your chances of buying a new car.

 

And, the next chart shows the age group and income level. So, please account for new young buyers but also retiring old folks.

 

And please, if you want, I can dig out the statistics of the non-resident growth and the proportion of profession with high pay as oppose to those on S-pass and such, who will be unlikely to desire to spent their hard-earn money in Singapore. You will be surprised that it is not as high as you think.

 

Some more, a large number of those in the higher bands typically get company cars or lease cars, so they don't appear in our market except through 3rd parties car rental companies and company cars.

 

 

[Tigershark1976]

lai lai lai.... last round my tikam was 10 thousand miles away from the actual result, this time round Anal Yee pang sai give me tips, sure win!

 

Cat A 60,888

Cat B 70,888

Cat E 73,888

[Imac]

lai lai lai.... last round my tikam was 10 thousand miles away from the actual result, this time round Anal Yee pang sai give me tips, sure win!

 

Cat A 60,888

Cat B 70,888

Cat E 73,888

 

No way COE is dropping.

 

3 of my office friends already top up another $3k and change their COE bidding to the guarantee package.

 

The agent told them alot of people booking during CNY period already top up/changed to guarantee package, those who refuse to lost out the July rebate.

[Aukang]

Anyone has any idea how many people are renewing COE for 5 or 10 years? That will be a better gauge of actual demand for new cars, since if many renew their cars' COE, they are unlikely to be in the lookout to bid for COEs unless price falls drastically

[will80]

 

 

The key thing is that each preceding price group must be satiated first before the price can fall.

So, those who can afford 65K COE must all buy first before those who can afford 55K COE. Then COE will fall to 55K so that group can start buying.

 

 

 

 

I once belong to the 55K COE buying group. But as time passed by with my current ride COE expiring soon on Oct 15 and also with the CEVS rebates changes in Jul 15, I decided to 'upgrade' myself to the 65K COE buying group which I did (bought mine during the Car@Expo). If we can afford 55K COE, most likely we can afford the $65K COE as the different is only 10K. The issue is how long can we wait as I believe that a lot of people like me who belong to the 55K COE group will 'upgrade' to the $65K COE group when their current ride is going to expired soon.

[Enye]

I'm one of them... gonna go all the way to very last day.

 

 

No wonder you are trying to talk down the market

 

😂

Edited May 17, 2015 by Enye

[Limwsv]

Anyone has any idea how many people are renewing COE for 5 or 10 years? That will be a better gauge of actual demand for new cars, since if many renew their cars' COE, they are unlikely to be in the lookout to bid for COEs unless price falls drastically

 

Yes, Yoyo put up the data. Check his thread on Dereg. Base on last month data, 95% of owners chose to return their COE back to the pool.

[Limwsv]

 

 

I once belong to the 55K COE buying group. But as time passed by with my current ride COE expiring soon on Oct 15 and also with the CEVS rebates changes in Jul 15, I decided to 'upgrade' myself to the 65K COE buying group which I did (bought mine during the Car@Expo). If we can afford 55K COE, most likely we can afford the $65K COE as the different is only 10K. The issue is how long can we wait as I believe that a lot of people like me who belong to the 55K COE group will 'upgrade' to the $65K COE group when their current ride is going to expired soon.

 

Number of COEs up for grab is found in another thread. The anticipated number of COEs going back for recycling anticipated to 290 thousands over the next 3 years. Variance will be due to those who choose to renew.

 

In addition, you misunderstood pricing mechanism of the market. You insist that you use to be able to afford 55K COE, then decide to upgrade to 65K COE. Er... the actual price you are willing to pay is all along is 65K. I won't get a honest answer probably, but if the COE is 75K or 85K at the point of time you sign the dot line, would you still have gone ahead? If yes, then actually, you got a value deal at 65K since your actual price point is 75K.

 

There are many in the market that is probably hoping COE to go to 55K, because that is really the break point for them. Above that price level, they will not enter the market at all.

 

In fact, that's what we have seen in Feb, when a couple of ADs lower that car prices, that allow those lock out of the market to enter. Of course, some of them found themselves having to pay more for converting their non-guarantee bids, that's why it's consider a non-rational decision. They have ended paying more than what they have been willing to pay.

Edited May 17, 2015 by Limwsv

[owak]

 

No way COE is dropping.

 

3 of my office friends already top up another $3k and change their COE bidding to the guarantee package.

.

Top up only $3k, so little. Which AD?

[will80]

 

Number of COEs up for grab is found in another thread. The anticipated number of COEs going back for recycling anticipated to 290 thousands over the next 3 years. Variance will be due to those who choose to renew.

 

In addition, you misunderstood pricing mechanism of the market. You insist that you use to be able to afford 55K COE, then decide to upgrade to 65K COE. Er... the actual price you are willing to pay is all along is 65K. I won't get a honest answer probably, but if the COE is 75K or 85K at the point of time you sign the dot line, would you still have gone ahead? If yes, then actually, you got a value deal at 65K since your actual price point is 75K.

 

There are many in the market that is probably hoping COE to go to 55K, because that is really the break point for them. Above that price level, they will not enter the market at all.

 

In fact, that's what we have seen in Feb, when a couple of ADs lower that car prices, that allow those lock out of the market to enter. Of course, some of them found themselves having to pay more for converting their non-guarantee bids, that's why it's consider a non-rational decision. They have ended paying more than what they have been willing to pay.

 

For those belong to the 55K COE group, most likely their target is set at B&B cars that cost around $100K. This mean that they already had at least $40K (40% downpayment) cash set aside for their purchase. For 65K COE, what they need is just additional $4K (40% downpayment) which is about $44K. If a person is able to save up to $40K, most likely he will be able to save an additional of $4K within the next few months.

 

So what I meant is that as of now, 55K is the break point for them. But in the near future, their breakpoint will be shift to $65K. This is more so for those whose ride will be expiring soon. They will try their best to shift up their brake point as men will be men. Once men had a taste of owning a car, they will want to continue owning a car.