Singapore’s wealthy pursue luxury cars even as inflation drives up prices
The price of food, energy and other necessities is rising worldwide. But in Singapore, the rich still want luxury cars.
People in the city-state are paying the highest amount in decades alone for the right to own a premium car, official data showed on Wednesday.
The cost of the most exclusive driver’s licenses, which residents must have before they can buy a car, crossed six figures for the first time in at least 20 years in June, according to official data.
Open category COEs, which allow for the purchase of vehicles other than motorcycles, rose 5 percent to S$100,697 ($73,230) in the most recent bidding round, compared to the previous auction in mid-May. Certificates for larger cars rose by a similar margin to S$100,684.
The car market is heating up as prices rise across Singapore, reflecting wider rises in the cost of living worldwide. Core inflation in the city-state reached 3.3 percent in April, the highest level since 2012.
Real household income in Singapore has been particularly hard hit by regional events and the rise in commodity prices following the Russian invasion of Ukraine.
Malaysia last week imposed a sweeping ban on the export of live chickens to protect domestic stocks. Singapore imported more than a third of its chicken from Malaysia in 2021, so suppliers of chicken rice, the national dish, have been forced to raise prices as they rush to secure supplies, local media said.
The decision was made after Indonesia temporarily banned palm oil exports, putting pressure on frying oil prices in Singapore.
Meanwhile, in recent months, a wave of foreign professionals has descended on the island trying to escape Hong Kong’s tighter pandemic restrictions, raising demand and prices for homes. The vast majority of citizens and permanent residents live in public housing, leaving expatriates 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. Since the price of these certificates can exceed the cost of a typical vehicle, many middle-income residents are deterred from owning a car.
“Everyone thinks it’s cheaper” in Singapore, says Heather Thomas, a small business owner who recently moved from Hong Kong. “I don’t think so at all. I don’t think I’d come close to buying a car.”
But wealthy residents, who will mostly buy COEs and open category certificates for larger vehicles, are still looking for luxury cars.
Certificates must be renewed every decade and sold through regular auctions, meaning prices fluctuate according to supply and demand. The June auction took place three weeks after the previous one, instead of the usual two, so received more bids than usual.
“I’m not going to stop collecting,” said one multimillionaire. It is still “beautiful for rich people” in Singapore.