April’s COE bidding was a shock to many, with all four-wheeled categories going up for both bids of the month. If you haven’t seen the graphs and arrow indicators at websites updating the COE results for last month, well, its all up and arrows are all red for all bids (except for motorcycles).
Not only was the rise in unison for all four-wheeled Categories for April, what is alarming is the the magnitude of the increases over the previous bids.
April First Bid (increase over previous bid) $ 2500
April Second Bid (increase over previous bid) $ 4040
April First Bid (increase over previous bid) $ 3701
April Second Bid (increase over previous bid) $ 4898
April First Bid (increase over previous bid) $ 568
April Second Bid (increase over previous bid) $ 4412
April’s upward momentum has not been good for those who are renewing in May – May 2019 PQP results here.
This may be the first time since that I have seen an increase in all Categories of an amount above $4000 at the same bidding exercise. Not very unlike this geyser, is it due to pent up demand?
Or maybe it’s due to a lack of supply. After all, the COE quota announced for the quarter of May to July is another reduction for Cat A and Cat B compared to the earlier quarter, with only the commercial vehicles having a greater supply of COE.
Thankfully, although we do not see lower prices, they are still increasing for Cat A and Cat B for the first bid of May 2019. But we do see that Cat B has lost that impulsive fear driven bidding increasing by only $10. However, we do still see that happening in Cat A with a $3505 rise.
Fear of Missing Out on Low COE
Part of the fear comes from the expectation that the 10 year COE cycle has come round to a point where the increase in price is supposed to come in. This ramp up in prices, if proven true, some years down the road in 2022-2025, we could see really high prices like the way they were when both Cat A and Cat B were priced in the $75,000 – $90,000 range from February 2012 to April 2014.
Or worse, because of this expectation, the ramp up would be sharp and quick and we would reach these levels earlier, as those potential buyers who fear the increase jump in to buy. This seems to be the picture now. And without a further increase in the supply of COE in the coming quarters, we are afraid that will be the trend, continuing into the coming quarter after this current one which starts in August. With COE renewals becoming as mainstream as purchasing a new car, new available COEs for bidding will be even more squeezed in the next quarter. After all, each one COE renewed means one less COE available for bidding.
So with that as the background, what is our prediction for the PQP for next month?
Predicted PQP for the month of June 2019
PQP Cat A Up, $31,488
Up by $3,602 compared to Cat A PQP of the month of May 2019.
A second consecutive largest increase for Cat A for the past two years plus period. As in, the last month’s increase of $1,711 is already large and this is more than double and the new largest increase for the past two years, coming in just one month after the last one.
PQP Cat B Up, $43,747
Up by $4,184 compared to Cat B PQP of the month of May 2019. After a $4k increase last month, the PQP increase momentum seems to not have been dampened.
PQP Cat C Up, $28,330
$511 up, compared to Cat C PQP of the month of May 2019. This increase is lower than last months and is a sign of a more favourable environment in Cat C compared to A & B.
The above figures are our prediction for June 2019. For the May renewal price, click here. Why are we talking about May now that we have predicted June?
There is still a chance to renew using the PQP price for May, saving the increases we predicted above!
We have cases of renewals done in March for customers whose expiry comes only in November 2019. We have calls from those who expire in January of 2020. You do not need to feel it is a waste to renew early. It is a little pinch to renew early, but it is a much bigger waste to wait! We will show you how to calculate! If you are interested to know, contact us!
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Your success in saving on COE renewal is our measure of a job well done! Happy customers make us happy!