Hong Kong has half as many cars as SP and yet SP has the COE

[movingtospore]

http://www.bloomberg.com/news/2014-02-1 ... e-day.html

I'd love to see an economic analysis of how the COE acts as some sort of weird incentive to buy cars rather than not buy cars.

[Barnsley]

The COE system guarantees the max number of cars on the road at any one time.

Has there ever been an occasion when all COE's have not been bought in any month?

Limit supply and you create demand.

[Sergei82]

Property cooling measures boosted property sales A LOT at first. Only now it is starting to slow down.

[nutnut]

COE and PARF are seen as some kind of investment here, where cars are inherently poor investments everywhere else, only holding their value as a minimum (something like the mini used to be), unless you are looking at classic cars of historical note.

Maybe that has something to do with it, also, the materialistic attitude towards life here is the most popular.

[maneo]

http://www.bloomberg.com/news/2014-02-1 ... e-day.html

I'd love to see an economic analysis of how the COE acts as some sort of weird incentive to buy cars rather than not buy cars.

The COE may have worked initially to control car ownership, but now, the exclusivity of being able to afford the COE actually makes people "need" to have a car. Once they have the car, the cost of ownership is already sunk into it, so they have to drive it as much as possible, defeating the effect of the COE on reducing congestion. Thus, by making cars one of the "5 C's," the COE is having the opposite effect from what was intended.

In the past HK didn't need a COE because parking is so expensive.
In HK, it was cost of operating, not cost of ownership that would keep people from clogging the streets. Lot's of people own cars, but would only drive them on weekends, especially when going longer distances (e.g. deep into NT or from NT to HK island).

However, a noveau riche MB owner isn't likely to be fazed by high parking fees, so it's not a surprise that they are now clogging HK's roads. If they can afford the Benz they can afford the parking & a COE is not going to deter them from buying their Benz. It will only hurt the occasional drivers that own the more affordable cars, who were not clogging the roads anyway.

Maybe they should adopt SG's old system of daily labels for CBD access.
You might find that the MB owners would find their time too valuable to be standing in line to buy CBD access labels.

[maneo]

The COE system guarantees the max number of cars on the road at any one time.

It also seems to guarantee that of all cars that are owned the maximum number will be on the road, too.
After all, if you've paid so much just to own the car, better be using it as much as possible, even if you don't really have to.

Has there ever been an occasion when all COE's have not been bought in any month?

Limit supply and you create demand.

Yes, there have been several isolated months in the past when the COE was only $50.

It's like winning a lottery for the people that submitted their bids in those months.

[movingtospore]

I've often wondered what would happen if they just threw out the COE system once all the new train lines etc are done and it will be (hopefully) easier to get around. Would everybody run out a buy a car? Maybe. Maybe not. Maybe people would choose to take the train because driving is just too annoying, or parking is too expensive, etc...as they do in HK, NY, London..

They could throw out the COE, but keep the road tolls, and make the train free. LOL. Oops there goes one of their biggest revenue earners. The COE that is...

[ScoobyDoes]

However, a noveau riche MB owner isn't likely to be fazed by high parking fees, so it's not a surprise that they are now clogging HK's roads. If they can afford the Benz they can afford the parking & a COE is not going to deter them from buying their Benz. It will only hurt the occasional drivers that own the more affordable cars, who were not clogging the roads anyway.

The problem is more that parking rates have not changed at all in the last 10-15yrs since I lived there and left. I still go over every quarter and am still amazed at seeing the same parking signs on the same buildings as I did in the late 90s.

New cars in HK have gotten a lot more expensive than they used to be, I think taxation has become an issue there too?

A new E200, whilst still much cheaper than Singapore, is ~Euro55,000 (SGD94,000) against ~Euro40,000 in Germany which includes a 19% VAT.