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Golf
membership prices slide
How low can it go? That is the
question holders of golf club memberships are asking themselves as the price
of this asset class sinks to its lowest levels in two years.
The BT Golf Index, which tracks the
composite open market prices of a basket of leading golf clubs, fell 13.28
per cent this month to 149.54 points as transactions plummeted and demand
for memberships dried up.
This is the fourth consecutive month of
decline for the club membership prices, which first started showing signs of
weakening in August.
The open market quoted price for a
membership at Singapore Island & Country Club fell another $10,000 to
$150,000 from last month as more sellers emerged in the market to dump their
memberships. The club's open market price surged to $220,000 late last year.
Many of the sellers are said to be financial sector professionals for whom
job security is a thing of the not-too-distant past.
The same story seems to be playing out at
Sentosa, where membership price is now at a new recent low of $160,000,
compared to $180,000 in November. Many of the sellers are said to be
long-serving expatriates who have relocated to their home bases.
Second-tier clubs were not spared either.
Jurong Country Club membership is now at $45,000, while Seletar and Raffles
are back to late-2006 levels at $42,000. Changi brings up the rear at a mere
$6,000.
So is this a good time to buy? It depends
on your bank balance and how desperately you want to be a member of a club,
say membership brokers.
But given the negative 'wealth effect'
under the current economic circumstances, where job losses, pay cuts and
plunging stock markets are the rule of the day, few would really declare an
appetite for a golf club membership. That being so, one can reasonably
expect prices to continue drifting down. Some industry observers believe
that a 20 per cent downside is still possible as some of the more hard-hit
members decide to bail out. -
2008 December 6 BUSINESS
TIMES
Golf
club memberships breach $300,000 barrier
Club membership
prices in Singapore have just crossed a new milestone.
For the first time,
someone has paid $300,000 for a golf club membership.
The amount was paid
for a lifetime membership of the 36-hole Sentosa Golf Club (SGC). And in the
process, this as-yet unnamed buyer has set a new all-time high for the price
of a club membership in Singapore.
The transacted price
is $30,000 above the current quoted bid/ask open market price of $270,000
for an SGC membership.
And with the latest
transaction, it could rise further, say club membership brokers.
'It's a
supply-demand thing, and there is virtually no supply at the moment because
very few members want to sell,' said Lee Lee Langdale of SingGolf. 'Many
members are holding out in the hope that prices will rise to $350,000 or
higher after the casino on Sentosa is up and running.'
At its latest
transacted price, the membership of SGC, which is also home to the US$4
million Singapore Open, is up 71 per cent from its January 2007 price of
$175,000.
Said SGC's executive
director Robert Bird: 'We were a little surprised with this transaction as
it represents such a jump from the previous price. Having said that, it is
clear that the market is reacting very positively to the current
developments in and around Sentosa such as the development of Resorts World
and Sentosa Cove. There are several other five-star hotels and other
attractions in the offing as well as the high-profile events at our club
such as the upcoming Barclays Singapore Open.'
And it is not just
Sentosa that is flying high.
Many of the
second-tier clubs have also had a good run: the open market prices of Orchid
Country Club, Seletar Country Club and Jurong Country Club have risen by
$20,000 this year to between $55,000 and $64,000 each.
Meanwhile, the Tanah
Merah Country Club's open market membership price is currently just above
$180,000.
The price of the
Singapore Island Country Club (SICC) membership has started showing signs of
softening. After rising to $220,000 earlier this month, from $163,000 in
January, its latest open market transaction was at $218,000.
'There have been a
lot more sellers of SICC membership emerging recently,' Ms Langdale
observed.
Many of those now
selling are members who bought into the club in the late 1990s at $150,000
and below, thus realising a handsome gain even after coughing up $30,000 in
transfer fees.
The question is
whether SICC's membership price is a sign of things to come. In short, can
club membership prices still hold on to their recent peaks if the financial
markets get increasingly wobbly?
Probably not.
This is an asset
class which would probably be the first disposed of, if push comes to shove,
say industry observers.
In short, if an
individual has to choose between selling the condo, car or club membership
to raise cash, the choice should be obvious.
- SINGAPORE
BUSINESS TIMES 2007 September 22
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