Tag Archives: COE

Measures to cool property & car markets see some success

Singapore’s central bank has said its macroprudential measures have achieved “some degree of success” to cool the property and car markets, and it will recalibrate them as market conditions change.

Speaking at a dinner organised by the Asian Bureau of Financial and Economics Research on Tuesday, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said its macroprudential measures will support monetary policy and financial supervisory policies to secure sustainable asset prices and financial stability.

He said the central bank faces several key challenges ahead when implementing policies.

Externally, these include a “wall of money” and low interest rates that could potentially set off asset market bubbles. These could in turn affect consumer price stability and financial stability.

Domestically, Singapore is also facing a “demographic cliff that will tighten labour markets” and potentially set off a wage-price spiral that could unhinge inflation expectations.

Recently, Mr Menon said the MAS had to step in to moderate price increases in the property and car markets.

It was concerned that a sharp rise in asset prices could have implications for both price stability and financial stability. Spikes in Certificate of Entitlement (COE) prices could also affect consumer price stability.

As a result of MAS’ measures, “property prices finally appear to be stabilising,” Mr Menon said, with price increases dipping below 2 per cent last quarter compared to the previous quarter. COE premiums for cars have dropped 25 per cent since MAS’ restrictions on car financing in February.

Meanwhile, Mr Menon said MAS’ exchange rate-centred monetary policy remains relevant and the central bank will continue to use the exchange rate as its monetary policy tool to keep inflation in check.

He said: “Singapore’s fundamentals remain sound. Fiscal prudence, financial discipline, minimising debt and living within our means will provide us policy space and buffer to weather whatever comes ahead. This is an advantage most countries do not have.”

Source : CNA – 22 May 2013


Surcharge for second car owners being considered

Those who wish to buy more than one car in Singapore may need to fork out more cash on top of their Certificate of Entitlement (COE) in future.

The government is considering imposing a surcharge for the second car onwards – owned by the same person.

The move aims to better spread car ownership more evenly, given the limited COE supply.

If implemented, the surcharge will not apply to existing multiple car owners.

Buyers of mass-market cars who are currently competing for COEs in Category A with buyers of luxury cars may also see some relief.

The government is looking at factoring engine power as a way to better delineate Category A from Category B to improve the COE system.

In 2012, models that are commonly viewed as higher end options such as Mercedes Benz, Audi and BMW, made up more than one-third of category A registrations, compared to less than seven per cent in 2010.

The government will begin seeking views from the public and motor dealers on the possible changes next month.

The process will likely take about two to three months.

Source – CNA – 16 MY 2013