[dropcap size=small]T[/dropcap]he recent announcement that Raffles Country Club (RCC) will be acquired to make way for the High Speed Rail to Malaysia has put the spotlight on golf memberships once again. RCC is the second golf club to be acquired for the rail project, following the acquisition of Jurong Country Club two years ago.
In the past few years, the Government has reviewed the leases for various golf clubs in a bid to free up land to make way for development, sparking an air of uncertainty for golfers.

It has said it will not renew the lease for Keppel Club when it ends in 2021, while the Marina Bay Golf Course’s lease will not be renewed when it expires in 2024. Orchid Country Club’s lease, which expires in 2021, will be renewed for another nine years to 2030, after which there will be no further extension. There are 11 golf clubs with transferable memberships here, including Jurong Country Club and RCC.

Golf club membership fees have generally fallen since 2014 in the wake of government announcements that it was taking back land from three clubs and that two others would not have their leases renewed. Buyers, particularly speculators, have largely ceased trading in memberships. Take Seletar Country Club. A membership there is now trading at $43,500, down from $48,000 in 2014 and $62,000 in 2007.

However, with demand from die-hard golfers strong and the shrinking number of golf courses available, club membership brokers like Tee-Up Marketing Enterprises expect to see some price appreciation in the coming weeks. Tee-Up’s owner, Fion Phua, says golf is like an addiction for some people. “The number of golf courses is decreasing but the number of golfers will still be there. Golfers are walking the street looking for courses. In fact, some cannot use the toilet till they have their game of golf.

“If the wet markets at Jurong East and Jurong West close down, people will need to go to West Coast wet market, and if that is closed, they will head to Clementi market… So the golf market will become more aggressive.”

There are clubs at the higher end that boast more than one 18-hole course. As such, memberships at Sentosa Golf Club can cost as much as $275,000, says Tee-Up. A Singapore Island Country Club membership costs $182,000 while you will need to stump up $90,000 at Tanah Merah Country Club.

Smaller clubs with memberships below $50,000 are likely to see price movements first.
Phua is bullish that Warren Country Club can go up to $25,000 this month from $23,500 now, while she tips Seletar Country Club to rise from $43,500 to $48,000.

Is golf membership a viable investment?

Golfers know getting a membership is a no-brainer, due to the amount of green fees they can save, particularly if they play frequently. So it can be a viable investment.

Here’s how the math works out. Let’s assume the membership is $100,000 and the average green fee is $200 per game. Four golf games a month makes green fees of $800 a month and $9,600 a year. If the golf club has a lease of 20 years, the saving in green fees works out to $92,000. And if you come from a family of golfers, your savings will be multiplied for your spouse and children aged below 21 or 23, depending on the club, who get to play for free.

Phua says it is still “cheap” to buy golf club memberships, especially for small clubs.

With a 13-year lease left for Warren Golf Club – which is trading at $23,500 – she works out that it costs only $5 a day to be a member. “At ‘Mickey Mouse’ (nickname for small) Changi Golf Club, whose lease expires in 2040 and which is trading at $6,300, it costs only 76 cents a day,” she says. Her calculations exclude the club’s monthly subscription fees.

However, long gone are the days when most people aspired to own a country club membership. It was one of the coveted five Cs – alongside cash, credit cards, condo and car. Back then, speculators could also make an easy profit by selling memberships on the open market.

Besides, people now have easy access to alternative sporting activities such as cycling, sailing, mountaineering and rock climbing. Furthermore, an 18-hole golf game takes many hours, mostly under the harmful rays of the sun. Golf brokers note that golf members now are typically those who are serious about playing and they are mostly in their 40s, 50s or 60s.

Lee Lee Langdale, owner of club brokerage Singolf Services, says owning a golf membership may not translate into financial benefits when you want to sell. And you would still have to pay monthly subscription fees, which range from $100 to $160, even if you do not use the facilities.

One key factor to consider when deciding if golf memberships make good investments is the high transfer fees, which can range from $3,000 to $20,000. “You take into consideration how much is your transfer fee and you might as well invest in bank shares and get dividends and better returns,” says Lee. “Get a golf membership only if you wish to play golf or make use of the club facilities.”

For example, Singapore Island Country Club comes with comprehensive amenities, including bowling, swimming, billiards, squash and tennis. Some country club members rank their membership as one of their worst investments. Keppel Club member Jimmy Chua, 57, bought a membership for about $28,000 in 2003. Its value has since halved. The club’s lease will not be renewed after it expires in 2021.

“The transfer fee plus GST is $12,840 and the market membership price is $13,800. I can’t even break even,” says Chua, who also has a golf membership in Johor.
He stopped playing golf a year ago because his knee developed arthritis. He usually does not use any of the club’s facilities, so the membership is turning out to be a white elephant. The monthly membership subscription fee at Keppel is $121.

This story first appeared in The Sunday Times.