Is it a good time to buy a club membership?

Is it a good time to buy a club membership? 

Prices are soaring so do weigh the returns if you are buying one for investment
By Lorna Tan, Finance Correspondent 
LIKE a golf ball whacked harshly with a six iron, club memberships have hit dizzying heights recently, in tandem with rising prices for property and other assets.
Soaring fees are par for the course at premier golf clubs such as Sentosa and the Singapore Island Country Club (SICC).

At Sentosa Golf Club, transfer membership fees have hit a record of $245,000, up from $146,000 a year ago. SICC’s fees are now $225,000, up from $161,000 a year ago.

The American Club leads the social club pack with transfer membership fees of $100,000, up from $58,000 last year.

Still, some clubs buck the trend and not without reason. Membership fees at social clubs Arena, Fairway and Superbowl have stayed stagnant because their land leases are expiring soon.

Though prices are at record levels, experts still see potential upside to jumping on the club bandwagon.

Leaders of the pack: Most expensive memberships
Sentosa Golf Club
Transferable membership price: $245,000

… more
Membership brokers expect fees at Sentosa Golf Club to hit $350,000 once the upcoming integrated resort (IR) on the island makes its presence felt.

The addition of a new $60 million clubhouse at SICC’s Island location on Upper Thomson Road is expected to lift its appeal. This could send fees up towards $300,000, said Ms Fion Phua, the sales director for club membership broker Tee Up Marketing Enterprises.

Ms Phua tipped Keppel and Warren as being good golf club buys because their transfer fees are lower.

The owner of club brokerage Singolf, Ms Lee Lee Langdale, believes ‘it is never too late to buy’.

‘All the clubs are good buys in the Singapore context, depending on the buyer’s needs for golfing and other country club facilities for his family,’ she said.

Price variations reflect the quality of the courses, facilities and location.

But Ms Langdale and Mr Brian Goh, a senior vice-president at ipac financial planning Singapore, don’t see club memberships as a financial investment.

‘Chances that membership rates will increase might look good now, but it is a gamble. Further, with the monthly fees, you’re looking at negative cash flow, which may last for a while if prices remain flat,’ said Mr Goh.

Instead of buying a membership in a club now, you could invest the money in a well-diversified portfolio that would eventually allow you to buy a membership at an even more exclusive club as well as send your child to university overseas.

Meanwhile, golf at Bintan or across the Causeway.

Chief executive Chris Firth of wealth management firm dollarDEX believes that, as long as the economy is booming and the stock market doesn’t crash, club prices will keep rising.

However, if you’re buying a membership for speculation, there are cheaper, better ways to make money, like buying stocks or funds.

‘It’s a lot easier to buy, hold and sell a stock,’ said Mr Firth, who is a member of The British Club and Raffles Town Club.

‘And it is not as expensive to transact as club memberships, which come with transfer fees. If no one wants to buy the membership, you could be stuck with it for years.’

For those who are still keen on getting a club membership, here are some tips:
Affordability

Pick a club that is within your means. Factor in the monthly financial commitment needed to maintain the membership. Include subscription fees and food and beverage levies.
Transfer fee

Find out what the club’s transfer fee is as it will affect the membership’s resale value. For instance, if you buy a membership at $23,000 and the transfer fee is $3,000 and the goods and services tax (GST) comes to $210, you would have to sell it for $26,210 just to break even.

Don’t forget the agent’s fees, which range from $100 to 1 per cent of the membership fee.

High transfer fees sometimes deter buyers because they lower the returns, which would affect the investment value of the membership. In some cases, transfer fees can go as high as $32,100 inclusive of GST.
Location

A club near your workplace or home would allow you to get more mileage out of your membership.

You could drop in for a meal, a swim or a workout at the gym if the club is close by. If it is near your home, your spouse and children could also use the club facilities more often.
Facilities

Decide what you or your family like doing most and pick a club that best suits everyone. For instance, if you are a serious golfer, pick a club that offers golfing instead of just social amenities.

Alternatively, if you plan to visit a club with your family, choose one that offers facilities for everyone: for instance, a childcare centre, an Olympic-size pool, or jackpot and mahjong rooms for your parents.
Number of members

A club with too many members might mean insufficient facilities or longer queuing times for amenities.
Management style

Check if the place is a members’ club or a proprietary one. The former allows you voting rights and a say in determining club policies. If the club is proprietary, find out if the management has a good track record in order to gauge the standard of service you can expect.
 
Source : Straits Times - 05 Aug 2007

S’pore’s last kampung worth $33m but landowner won’t sell

S’pore’s last kampung worth $33m but landowner won’t sell 
By Bryna Sim 
MS SNG MUI HONG, 54, refuses to even think of selling the 12,248 sq m Punggol property, which is jointly owned by her and three other siblings. She spends her days gardening, cycling and chatting with her tenants who live in the self-built kampung there. PHOTO: WANG HUI FEN
DURING this period when people are rushing to cash in on their properties, Ms Sng Mui Hong is determined to sit tight on her sizeable piece of land in Punggol.
The 12,248 sq m plot - about the size of three football fields - sits at Kampung Lorong Buangkok, off Sengkang East Avenue.

Valued at $33 million, it is jointly owned by four people - Ms Sng and her three older siblings.

While her two elder brothers and one elder sister have married and moved into HDB flats, the 54-year-old Ms Sng has no plans to move or sell.

She gets by on the approximately $300 in rent she collects from her tenants.

‘My father bought this land, it has much sentimental value for me,’ she said. ‘I would feel trapped in a flat.’

The family land was purchased for an unknown sum in 1956 by her father, the late Mr Sng Teow Koon, a traditional Chinese medicine seller.

Ms Sng was then only three years old.

The rent of the 20 families who live in the kampung’s self-built zinc-roofed huts ranges from $6.50 to $30 a month.

Their huts are an average of about 1,500 sq ft each, and range from three to five rooms, depending on how their dwellers chose to build them.

They have basic utilities such as running water and electricity, and are surrounded by jackfruit and banana trees, as well as chilli padi and lime plants.

The kampung made headlines in March 2004 when it became flooded after heavy rain.

Mr Jamil Kamsah, 53, a make-up artist, has been living in the kampung for 40 years.

‘I can have garden parties right on my doorstep!’ he said.

The kampung residents also enjoy other benefits.

Ms Sng said she has not increased the rent in 40 years. When her tenants are short of money, she lets them pay in kind - with rice and fruit.

Ms Sng spends her days gardening, clearing drains, cycling and chatting with her tenants. She has a television set, a washing machine, radio and a flush toilet.

She seldom leaves the kampung. Relatives bring groceries during their weekend visits. She lives with her two single nieces, both in their 30s.

One of them, Ms Sng Li Jing, 34, works as a clerk at the Institute of Technical Education (Geylang Serai) and does not mind the one-hour bus journey to work. ‘I enjoy the simplicity of life here,’ she said.
Source : Straits Times - 05 Aug 2007

Families feud over real estate in red hot market

Families feud over real estate in red hot market 

At least seven cases of families battling it out over properties reported over the past two years
By Melissa Sim and Jamie Ee Wen Wei & Teh Shi Ning 
FOR 50 years, cafe owner Mohanlal Ramchand Daswani and his mother lived happily together under one roof.
He said that he was her main caregiver, and paid for all her medical bills.

Today, they do not talk to each other - all because of a lawsuit over a Savannah CondoPark apartment in Simei, which Mr Mohanlal, 51, bought last year.

His 86-year-old mother, Mrs Ishwaribai Ramchand Daswani, accused him of using her money to buy the four-bedroom apartment and putting it under his name.

The money had come from the $1.06 million proceeds that she had received from the collective sale of the family home in Phoenix Mansion along Cairnhill Road in 2005.

He claimed she had given him the money to buy the apartment for himself. He is married with two children. Mother and son settled the case last week after a day-long trial, but bitterness lingers.

Families feud over real estate in red hot market

Mr Daswani, the sixth child of seven children, said he is disappointed with his mother’s demands and would rather ‘cut off all ties’ with her.

His mother has declined to comment.

At a time of rising property prices, property disputes involving family members have been hogging headlines.

Besides Mr Daswani’s case last week, there was also the lawsuit businessman Chang Ham Chwee brought against his low-IQ daughter and three siblings over three Paya Lebar bungalows worth at least $8 million.

In the past two years, there have been at least seven reported cases of families feuding over properties.

Lawyers interviewed by The Sunday Times said anecdotal evidence suggests that the property boom - residential property prices jumped 8.3 per cent from April to June this year alone - could have played a part in quarrels over property.

One lawyer, Mr V. Subramaniam, said that while people have become more aware of their rights, the property boom has made it ‘more worth their while to bring the case to court’.

Wong Partnership lawyer Andre Maniam agreed. ‘It is a function of the property market,’ he said.

He is representing Mr Chiam Heng Hsien, 62, who is up against his family who wants to sell the 40,000 sq ft of prime land in Killiney Road on which Mitre Hotel sits.

The family had tried to sell the site at the height of the last property boom in 1996. Mr Chiam, who has a 10 per cent share of the property, reportedly refused to allow the sale unless he received $21 million.

This year, the family returned to court. The judge has ruled that the site will be sold by public tender and ordered Mr Chiam to vacate the site at least four weeks before the sale is completed.

However, it has not been decided whether he will be compensated.

The property is currently estimated to be worth $100 million - nearly 30 per cent more than its last offer of $72 million in 1997.

After rulings are made, however, reconciliation in most cases is near impossible.

Mr Daswani has agreed to return his mother 95 per cent of the apartment’s current value - about $845,000 - but said: ‘I think at this point, enough is enough. I need to get on with my life.’

Mr Chiam of Mitre Hotel said: ‘I don’t think the relationship can be the same again.’

His cousin, Sloane Court Hotel founder Chiam Heng Luan, 93, who led the other relatives in the court battle against Mr Chiam, could not be reached for comment.

Businesswoman Chan Siew Khim, 69, who is battling her 68-year-old brother, Mr Chang Ham Chwee, said it is ’shameful’ for family members to wash their dirty linen in public.

In court, Mr Chang, a businessman, sits separately from his siblings and they avoid eye contact.

‘Why must it turn out like this?’ his sister laments.

It is a question which Mr Chew Tong Seng, 72, and his wife, Ng Mui Yan, 68, too ask themselves.

They successfully sued their eldest son after he sold their Cactus Road shophouse in Yio Chu Kang for $890,000 and kept the money.

Madam Ng said in Mandarin: ‘We worked hard to bring him up, but now we just get heartache.’

The parents have not spoken to their son since the case concluded in 2006. They have five sons.

When contacted, their son Mr Chew Cheng Quee, 45, a businessman, who is married with two sons, said he has been ‘deeply hurt’.

‘We have got along for over 40 years…I can lose the money, but relationships, cannot. I can’t even eat or sleep properly now,’ he said in Mandarin.

One year after his wife’s death, taxi driver Tay Peng Keng, 57, still cannot bring himself to talk to his mother-in-law, who sued the couple for more than $520,000.

Madam Hwang Chow, then 79, said that was her share of proceeds from the sale of a three-storey house in Telok Kurau they had jointly bought, then sold in August 2005 for $1.39 million.

After the case was settled in February, Mr Tay paid his mother-in-law $325,000. Three days after receiving the court papers, Madam Ong Foon died of cancer. She was 51 years old. The couple have one daughter.

Mr Tay now says: ‘I just want to stay as far away as possible from them.’

The Sunday Times tried to contact Madam Hwang through her lawyer but she did not respond.

Madam Chan, however, is already certain of one outcome: ‘Because of money, a family becomes like this…Money can be earned, but kinship cannot be.’

Source : Straits Times - 05 Aug 2007

No-go on Horizon Towers sale: Minority victory after long fight

No-go on Horizon Towers sale: Minority victory after long fight 
By K.C. Vijayan and Bryna Sim & Melody Zaccheus 
WHEN Mr Hendra Gunawan and three of his neighbours tried to engage lawyers to block the collective sale of Horizon Towers, three firms turned them down flat.
All felt they had no case. The last time the Strata Titles Board (STB) ruled in favour of minority owners was seven years ago.

Although more than 80 percent of the owners were reported to have signed the collective-sale agreeement, it still needed the board’s approval before the sale could proceed.

But in June, Harry Elias Partnership agreed to represent them, and on Friday, the board ruled in their favour.

The firm’s lawyer Philip Fong explained that the deal was thrown out because the application for STB approval did not comply with the law.

‘They dismissed the application on this ground alone, and not on the merits of the case.’

For the minority, however, it has been a long fight.

Although 33 owners objected to the sale, only nine turned up to file an official objection with the board in late May.

Besides the four, three owners were represented by Tan Kok Quan Partnership, another by Pang & Co, and the last chose to represent himself.

Mr Gunawan, a 51-year- old businessman, attended all the mediation meetings and hearings since they began late last month.

Now, he is just relieved that he will get to keep his home of seven years.

‘We were determined and committed to our cause; the comfort we so enjoyed in this home was at stake.’

The two tower blocks in Leonie Hill were due to be sold for $500 million to Hotel Properties Limited, Morgan Stanley Real Estate and Qatar Investment Authority, the investment arm of the Gulf Arab state of Qatar.

When STB threw out the deal, HPL issued a statement reserving its rights against the majority owners who signed the collective sale agreement and the sales committee of the property.

Lawyers, however, say that the contract to sell was conditional upon STB’s approval. That would have protected the majority owners from a breach of a commercial contract.

But the contract may have contained other clauses which enable buyers to examine whether the majority owners had attended properly to technical issues - such as making sure approval papers are in order.

One lawyer who spoke on condition of anonymity said: ‘This is a big area, and if the potential loss to the buyer is $500 million, then they might be willing to spend $1 million to test the case in court.’
Source : Straits Times - 05 Aug 2007

Extra help for needy to buy HDB flats

Extra help for needy to buy HDB flats By Goh Chin Lian LOWER-INCOME families buying their first Housing Board (HDB) flat are to receive more help from the Government. The move is to ensure that HDB flats remain affordable for them amid rising property prices. What they will receive is still being worked out, said National Development Minister Mah Bow Tan yesterday. At the same time, the Government is looking into offering older Singaporeans more options to unlock the value of their HDB flats so that they can have cash in hand to live comfortably in retirement. Mr Mah did not give details of these plans in his speech at a National Day dinner in Tampines last night, but later told reporters that they should be ready before the end of the year. He also told reporters that in deciding the extra help for needy first- time flat buyers, factors such as family income and ability to repay the loan will be taken into account. Early last year, the Additional CPF Housing Grant was introduced for families with a monthly income of up to $3,000. They can get up to $20,000 in extra subsidy. ‘HDB is currently looking into improving the Additional CPF Housing Grant to see if it can offer more assistance to more households,’ said Mr Mah. The need to tweak it is because HDB flats are now costlier as a result of the economic upswing. Prices have risen by 4.2 per cent in the first half of this year. ‘Even as home prices go up, it’s important for us to keep public housing affordable to as many Singaporeans as possible, especially to the low income. ‘So I think we need to look at how grants and subsidies can be tweaked,’ said the minister. Hairstylist Peter Soh, 26, hopes to buy a flat with his jobless mother. ‘Every little help from the Government counts,’ said Mr Soh, who earns about $1,500 a month. With the economy projected to rise by 5 to 7 per cent this year, Mr Mah sees the value of HDB homes continuing to rise. On average, more than 800,000 HDB home owners have seen their property appreciate by over 6 per cent in the last 18 months, he noted. It affirms the point that HDB flats are a good long-term investment, said Mr Mah, adding that they also have given Singaporeans a stake in the country’s progress. For the elderly, Mr Mah said they now have a few ways to monetise their flats to supplement their retirement expenses. They are: sell and move to a smaller home, rent out the flat and move in with a family member, or do a reverse mortgage by pledging the property for a sum of money. Noting that reverse mortgage has not taken off, Mr Mah said: ‘We will have to study why it is not popular. ‘Going forward, we can and will do more to put in place more options,’ he added. Source : Straits Times - 05 Aug 2007