COE on a 10year high

PREMIUMS for Certificates of Entitlement (COE) have struck a 10-year-high for all categories, according to data from the Land Transport Authority.

Cat A COEs, used for cars below 1,600cc and taxis, now cost $39,000 apiece. The category also saw the largest increase as its price went by 14.7 per cent this week compared to the previous bidding on Nov 3.

Cat B COEs, used for cars above 1,600cc, was marked up 5.3 per cent to end at $47,890.
The Open Category, used generally for cars, crept close to the $50,000 barrier. It ended at $49,890, an 8.5 per cent increase.

Premiums for commercial vehicles inched upwards by 0.6 per cent to close at $31,202 while motorcycle premiums notched a higher increase of 8.5 per cent to end at $1,502.

It was only in January this year that COE premiums for Cat A were still at around $18,500, a far cry from today's price levels.

Comments:
WeiSiang: During the 1960-1970s, cars could perhaps be an appreciating asset to many, but it has since turned to become a liability, especially in Singapore. From the article above, the government has yet stretched the financial gap of the rich and the poor, leaving a huge gulf between the rich and poor classes.
I hear my parents grumbling, friends complaining, in this win-lose situation where the citizens are obviously forced to dump their cars to convert in faithful public transportation users.

I personally do not adhere to this method of solving increasing private transportation users. I believe, if thought deeply, and with careful planning, the problem of solving increasing number of cars on the road could perhaps be solved, without hurting the already tight finances of the citizens.

Koofang: Personally, I don't really like that fact that the government is increasing the price of COE. This results in all vehicle users to pay a larger sum of money in order to get a car. The purpose of getting a car is to  make transportation much easier. By increasing the price of COE, the average income families who own cars would be unable to afford it. This action therefore leaves them with no choice but to sell their cars whereas the richer families can still continue to use their cars. Perhaps the government is trying to reduce the overcrowding number of cars on the roads, but this does not fully solve the problem.

WeeSoon: Many people may hate the COE policy, but for me, I feel that it is necessary for the government to implement this policy. Many people may think that with COE it would be even more difficult to get a car. However if we were to put ourselves into the government shoes, we are actually helping not only ourselves but also to the environment. With the limited land area in Singapore, we can't afford to have so much cars on the road. We need to cut down the amount of cars to make every journey smooth riding, and one way would be not to get a car and take the public transport instead. The government price up the car amount, therefore indirectly reducing the amount of cars. Not only that, it also help reduce greenhouse effect. As most people know, Car emits out a harmful gas which could destroy our atmosphere. Therefore by reducing the cars in singapore, it is also helping ourselves to fight against global warming. Therefore once again i think that the governemnt had done a excellent job in coming out with this policy, it is like killing two birds in one stone.

Chrystal: I agree to what WeeSoon has said. I feel that it is necessary for the government to implement this policy too. However, in my opinion, increasing the COE continuously may not be effective anymore. This is because the rich will only become richer and they will most probably be able to afford the COE no matter how high it has risen. On the other hand, the poorer sector of the economy will not be able to afford cars. The rich will be able to own many cars while the poor will only be able to take the public transport.
On the other hand, I feel that the COE should only increase to a limit and not continuously. Instead, I feel that the government should implement a "One Family One Car" policy to limit the number of cars on the road. They should also consider decreasing the price of public transport to encourage more people to take public transplant and be more eco-friendly!

Zeena: This is really getting outrageous. Prices were already at a sky high price now its increasing even more. When will this maddness end? If goverment really wants to control the amount of cars on the road they could use other methods instead of keep increasing the prices of COE. Actually i feel that COE does not control the amount of cars on the road. Rather it jus decreases the amount of people buying cars. What about those cars that were bought during the lull period for the COE prices. They are still out there on the road. Futhermore, due to the ever rising prices of COE, cars has become more then a want. It has become a luxury. Certainly there are other ways to cut the amount of cars on the road but rising COE prices is diffently not 1 of them.

New Housing Measures to Cool Red-Hot Resale Market?

Market watchers said the new rules requiring private property owners to sell their homes within six months of buying an HDB flat will go some way in cooling the red-hot resale market.

New rules on second home loans may also moderate demand somewhat.

Some analysts expect the rules restricting dual home ownership to have an "almost immediate" impact on resale demand.

Chris Koh, director of Dennis Wee Group said: "Those who've dreamed of owning a HDB flat and a private at the same time now have to think harder. I would expect this will probably dampen prices a little.

"HDB owners who are hoping to find private property owners to buy their HDB flats and are willing to pay premiums, will no longer have that option. So those who buy flats today really buy it for owner occupation, which primarily is the function of public housing."

The new rules kick in on August 30, and some analysts estimate that about 10 per cent of such transactions will be affected.

HDB said those who have only recently submitted their applications to buy an HDB flat may be granted exemptions on a case-by-case basis.

But there will be no such leeway for buyers looking to finance their second home, be it private or HDB, with a bank.

Under new rules, they will have to cough up a larger cash payment - from 5 per cent previously, to 10 per cent.

And those with an outstanding loan can only get a bank loan of up to 70 per cent of the property's value, instead of the previous 80 per cent.

The idea is to prevent people from being overstretched by servicing two loans.

But those looking to buy a second home using a bank loan, may find themselves in a sticky situation. This is because a sales transaction takes a few months to complete and if you're in the midst of selling your home which has an outstanding loan, the higher cash requirements apply.

So one way around it is to complete the sale of your first property before buying your second, but this means you'll need to find a place to live in the meantime.

Koh suggested that an alternative is to take up a bridging loan from the bank to finance any cash or loan shortfall, should one buy first before selling.

Other industry watchers welcomed the wider options for the "sandwiched class" - so-called because their incomes are too high for most new HDB projects, but are too low for private condominiums.

They can now buy flats under the Design, Build and Sell Scheme (DBSS) and analysts expect some demand to move away from the resale market.

Comments

WeiSiang: After reading the article, i personally felt that it was a wise move implemented by the government in quelling the property hype in the earlier half of 2010. Price were skyrocketing and it prevented alot of low and middle income families from purchasing resale flats. Investors on the other hand exploited this opportunity to make property investment by buying on the cheap, and selling at exorbitant sums.
This events showcased yet another ability of the government in providing housing to the majority of its citizens. Effects of the policy has been felt nationwide, with housewives, young adults, teenagers to businessmen are heard blabbering away of the down side of this policy.

However, given the opportunity, i believe i would have taken similar stance. Bringing back to the macro viewpoint of providing affordable housing and maintaining happiness of the citizens. This would then ensure a sustainable living in Singapore.

WeeSoon: I personally think that the government had done a great job in coming out this policy.  To the higher income families, they are trying to make some money by buying flats at a cheaper price and then selling them for a high price. This, however, causes those lower income families to be unable to afford the money the high income families are asking for. Imagine more and more people start doing investment in houses, this will cause prices of houses to keep increasing, and soon, more and more people are unable to afford houses. Therefore i really like the idea of this new policy the government had implemented.

Zeena: This is an excellent policy implemented by the goverment. This strongly enforced the home ownership polices implemented years back. One objective of the housing policy is 100 per cent home ownership for public housing(for every eligible Singaporean to have a home ). By implementing the new policy, the Singapore government can further enforce this policy as it helps to make a stop to the ever rising price for public housing. This would then prevent the higher income families from buying the house and selling it at even higher prices for a profit. Therefore, this would increase the chances and percentage of more low income family to buy a HDB flat for themselves.

Koofang: I feel that the government had done a good job by implementing this new policy. Higher income families have been purchasing flats at a cheap price and then selling them at a very high price to the lower income families over the past few years so as to earn more money. This act has caused many lower income families to be unable to purchase a house because they cannot afford it. If this act goes on without any action taken, it can lead to these lower income families becoming homeless. However, with this new policy implemented, it can help to stop the price of the flats to stop rising. This can hence help to lessen the burden on these lower income families.

Chrystal: After reading the article, I feel that the government has done the right thing in implementing these housing measures. The Housing Development Board (HDB) was first set up to attend to the housing needs of Singapore. Its primary goal is to provide a shelter for all Singaporeans by selling HDB flats at a reasonable price in consideration to the poorer sector of the country.

However, people who have a higher purchasing power made use of this chance to buy houses and sell them at a higher price to make profits. They did not take into consideration those families who have lower incomes and are not able to pay for a house at such unreasonable prices. Hence, I feel that the government has done the right thing in protecting the poor by implementing these measures.