The car market is in for a rough ride for the next 3- 5 years. As I travelled in Bishan and Toa Payoh at about 9am, there are plenty of cars idling in the HDB car parks. It accounted for at least 30% of the car park space. What this means is that most people would really want to pay road tax, car installments than save money. Why is this so?
It could be they are so used to travelling by car, that they cannot let go of their valued possession. It could be they would like to save their face than to tell their friends and relatives that they lost their job and car. It could be they are in a dilemma, unable to sell their car because of lower resales prices and lost their jobs. Could those idle car owners be shift work workers who sleep in the day time? It is not plausible as shift workers are mainly low-wage workers, which means they are unlikely to afford a car.
Rough estimate of the car population is about 450,000 vehicles. If 20% of this vehicles which is 90,000 are forced sold in the 2nd hand car market, then the car resale prices will hit an all time low. Then the COE bids will also reach an all time low.
I was surprised that my prognostication in year 2008 that COE prices is a good indicator of when to enter the stock market. In year 2009 February, COE prices fell to a few thousand dollars and that is a great time to buy stocks that a great investors dream of for years. Now that share market has rebounded, let us be patient and await the next golden opportunities that lies ahead of us.
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