Published December 6, 2008

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.