The price of food, energy and other necessities is soaring globally. But in Singapore, the rich still want luxury cars.
People in the city-state are paying the highest amount in decades just for the right to own a premium car, official data showed on Wednesday.
The cost of the most exclusive certificates of entitlement, which residents must obtain before they are allowed to purchase a car, breached six figures in June for the first time in at least 20 years, according to official data.
Open category COEs, which allow the purchase of vehicles other than motorcycles, rose 5 per cent to S$100,697 ($73,230) in the most recent round of bidding, compared with the previous auction in mid-May. Certificates for larger cars increased by a similar margin to S$100,684.
The car market is heating up as prices rise across Singapore, reflecting broader increases in the cost of living globally. Core inflation in the city-state reached 3.3 per cent in April, its highest level since 2012.
The real income of households in Singapore has been hit particularly hard by regional events and the rise in commodity prices following Russia’s invasion of Ukraine.
Malaysia imposed a sweeping ban on exports of live chickens to protect domestic stocks last week. Singapore imported more than a third of its chicken from Malaysia in 2021, so purveyors of chicken rice, the national dish, have been forced to increase prices as they rush to secure supplies, according to local media.
The decision was made after Indonesia temporarily banned exports of palm oil, putting pressure on cooking oil prices in Singapore.
Meanwhile, a wave of foreign professionals seeking to escape Hong Kong’s stricter pandemic restrictions has descended on the island in recent months, driving up demand and prices for homes. The vast majority of citizens and permanent residents live in public housing, leaving expats racing to compete for the much smaller selection of private properties.
Singaporeans have long faced high fees to acquire COEs, which were introduced to curb traffic. As the price of these certificates can exceed the cost of a typical vehicle, many middle-income residents have been put off car ownership.
“Everyone thinks it is cheaper” in Singapore, said Heather Thomas, a small-business owner who recently relocated from Hong Kong. “I don’t think that at all. I don’t think I would get close to buying a car.”
But wealthy residents, who are particularly likely to purchase the open category COEs and certificates for larger vehicles, are still seeking out luxury cars.
Certificates have to be renewed every decade and are sold through regular auctions, meaning prices fluctuate according to supply and demand. June’s auction took place three weeks after the previous one, instead of the usual two, so received more bids than normal.
“I am not going to stop collecting,” said one multi-millionaire. It is still “beautiful for rich people” in Singapore.