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Prices
hit a plateau; cashing out an option
After rising sharply during the last six months, membership prices for
golf clubs appear to have reached a plateau of sorts.
At least that is the way some membership brokers describe it.
Indeed, the latest numbers show a distinct flattening out, especially
among second tier clubs which have gained substantially in percentage terms.
Of the 11 club memberships tracked by Business
Times,
only two saw an increase in open market prices - Sentosa Golf Club and Tanah
Merah Country Club. Raffles Country Club remained steady at $50,000, while
Seletar Country Club held at $45,000.
This flattening out in the overall price
trend has prompted some membership dealers to call a 'sell' on golf club
memberships.
'My personal view is that this is a good
time to sell if you want to make some money,' said Lee Lee Langdale of
Singolf.
'The stock market has performed very
strongly in the past few months, but the outlook for the coming months seems
rather stormy. If the stock market tanks or goes into a flux, we can expect
the prices of golf club memberships to follow suit.'
Indeed, this is what happened a year ago
when membership prices hit new five-year lows amid panic in the financial
market in the wake of the Lehman Brothers collapse.
Prices remained soft for the next five
months amid mounting job losses and departures by erstwhile high-fliers of
the financial industry.
While no one is predicting a return to
the 'bad old days' just yet, the increasing uncertainty about the direction
of the equity markets is causing potential buyers to pause.
Indeed, membership brokers report a
slight increase in enquiries on the sell side, mostly from holders who fear
another market collapse.
But even in the event of a stockmarket
pullback, top-tier clubs have more downside resilience than second-liners,
say membership brokers.
Singapore Island & Country Club
membership remains at $200,000, though this was down slightly from its
$205,000 levels several months ago. Raffles Country Club was steady at
$50,000.
On the other hand, there were noticeable
weaknesses in the membership prices of Jurong Country Club and Keppel Club.
The former is due for an upgrade, while
the latter is looking at the prospect of being relocated to a site in the
Seletar area in the north-east part of the island. Both need cash for their
respective projects and speculation is that they could go to members for
funds.
So where to from here for membership
prices?
If you believe the membership brokers,
prices will move sidewards unless there is a catalyst, such as a second wind
for the equity market.
The bottom line is, if you have multiple
memberships, consider some consolidation and take some cash off the table.
- 2009 October 16 BUSINESS
TIMES
Golf
club membership rally takes a breather
 
Prices
of golf club membership holding steady - for now
Stock prices
have tumbled to their lowest levels since 2003. On the property front, asset
writedowns and landbank provisions have begun. The job market is facing its
worst crisis in years. And the global financial market and system remain in
meltdown mode.
Yet, golf club membership prices here
have stayed steady, if not moved up slightly.
The BT Golf Index last month hovered at
143.78 points, barely a quarter of a point down from January's 144.03
points.
In fact some quoted open market club
membership prices actually rose during the month. Singapore Island Country
Club was going at $150,000, up 5.6 per cent from January's $142,000. Sentosa
Country Club membership had an asking price of $160,000, compared to
$155,000 a month earlier. Even second-tier Seletar was up $1,000 at $42,000.
So what gives?
A check with club membership brokers drew
a blank. Some noted that the first round of selling was done and the market
had 'dried up' somewhat, with very few transactions taking place.
Whatever the reason, there seems to be a
disconnect between the valuation of this asset class and the prevailing
economic realities.
It is generally recognised that movement
in asset prices is symptomatic of the prevailing economic condition. But it
would be quite a stretch to conclude that the new-found resilience in club
membership prices is indicative of a potential bottoming out in the
underlying economic fundamentals and financial markets.
Rather, as some membership brokers
suggest, what we could now be seeing is the eye of the hurricane. That
eerily quiet and calm moment before the second wave hits.
The first wave came when the people got
their pink slips between October and December last year. Many were from the
financial sector, and a significant number were expatriates who were forced
to return home.
Then things got somewhat quiet in January
and into February, leading into the Chinese New Year festive period. But
looking ahead, the indications are that the economic and financial
circumstances can only get worse before getting better. The Singapore
economy is expected to shrink some 8 per cent this year.
Last week, DBS forecast almost 100,000
job losses this year, with 10,000 layoffs in this quarter alone. While the
earlier job losses were largely from the financial sector, this is likely to
spread to the services and manufacturing sectors in the months ahead.
Meanwhile, the stock market continues
plumbing new multi-year lows. Property prices, which have been relatively
resilient so far, could soon collapse, according to many analysts.
In short, the 'other shoe' could drop
anytime in the coming months. That being the case, one should not expect
this surreal resilience in the golf clubs memberships market to hold for
long. After all, it is the least critical of the five Cs.
- 2009 March 7 BUSINESS
TIMES
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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