Chart of the Day: Average car COE premiums down 19% in Q1

Bidders are holding out for even lower prices.

Prices of Certificate of Entitlement premiums dropped steeply in the first quarter.

According to the Monetary Authority of Singapore (MAS), premiums slid 19% on a quarter-on-quarter basis on back of subdued economic conditions and continued expectations of further downside to premiums given the recent expansions in COE quotas.

This chart from the central bank shows that more than 70% of successful Category A bids were less than 5% above the qualifying COE premium in March 2016, compared to just 50% in December 2015. Meanwhile, the percentage of successful Category B bids that were less than 5% above the qualifying price rose to 48% in March, compared with around 35% in December.

As a result, car COE premiums in Q1 were approximately $11,000 lower compared to Q4 last year.

“This mostly reflected bidders’ lower willingness-to-pay. Consequently, the private road transport (excluding petrol) component reduced overall inflation by 0.5% point in Q1 2016, compared to 0.2% point in Q4 2015,” the MAS said.