Published July 25, 2009

Golf club membership rally takes a breather

Prices have fallen about 3-5% in July, transaction volume also down



AFTER going into overdrive over the last two months, fuelled by the stock-market rally and a pick up in other asset markets, the market for golf club memberships seems to be showing signs of plateauing somewhat.

Open market advertised prices of memberships have fallen by about 3-5 per cent this month, though price levels remain close to 12-month highs. But membership brokers say that the number of transactions has fallen sharply.

The benchmark BT Golf index, which measures a composite membership price movement of a basket of leading Singapore clubs, pulled back to 186.86 points this month, from 191.62 points in June. Still, the index is almost 40 points up from December 2008's 149.54 points.

'Many of the keener buyers have already purchased their memberships, so now it's more of a face-off between buyers and sellers,' said Lee Lee Langdale of Singolf brokerage.

The Singapore Island & Country Club membership asking price pulled back to $200,000, from $205,000 during the previous month. Sentosa Golf Club memberships are being quoted at $225,000, down slightly from $230,000 in June. And Tanah Merah Country Club slipped to $148,000, from $155,000.

In the mid-tier category, the 36-hole Raffles Country Club remained one of the best performers as it stood steady at $50,000, versus just $41,000 in March before the current stock-market rally.

Also holding up well was Orchid Country Club, which at $48,000, has risen significantly from its quoted asking price of $35,000 just three months ago. Keppel Club, which is slated for relocation in about a decade, slipped to $26,000.

So what is the prognosis for membership prices?

Prices have generally moved in tandem with the financial market, particularly the stock market, which has had a very good run since mid-March.

But increasing volatility in financial markets injected some caution into the golf club membership market. Also, most of the more desperate sellers and buyers have been largely 'cleaned' out of the market.

Looking ahead, the new buying will have to come from either from new money or new demand, as one industry watcher put it. New money essentially would be windfall gains, and largely from stock market investments, while new demand would come from golfers who have previously not had memberships.

And those looking to sell could be members who want to encash their assets, having either reached the twilight of their lives or having decided that they have one club membership too many. Where prices head would be determined by the demand-supply dynamics played out between these two groups.