Price of memberships falls by up to half as financial crisis hits companies, wealthy
Paggie Leung 9 February 2009
The price of second-hand club memberships has fallen by as much as half since the global financial crisis began to hit Hong Kong, and prices are expected to fall further.
Figures from agents who deal in memberships of Hong Kong’s exclusive private clubs, show that the market prices for memberships have declined on average by between 30 and 40 per cent in the past six months.
The number of sales has also halved.
“Similar to the property and stock markets, the trading of second-hand memberships has also been affected by the financial turmoil,” said Tony Chan Wai-hung, sales director at Everfine Membership Services.
“Some companies have cut their budgets or sacked staff, thus they no longer need the memberships. Some people are pessimistic about the [membership] market and the economy so they want to sell them ... or some just want money to recover losses in the stock market.”
Mr. Chan said some established clubs, such as the Hong Kong Cricket Club and the American Club, no longer took new members, and clubs usually limited the number of corporate or individual members to about 2,000, or even as few as 1,000. This had led to a second-hand trade in memberships.
Prices for memberships had soared since the Sars crisis in 2003 because of limited supply and strong demand, he said. Prices hit a peak in August last year, before the global financial crisis took its toll.
Mr. Chan said the price for an individual membership at the Discovery Bay Golf Club had fallen 41 per cent to HK$1.3 million from HK$2.2 million in August.
A corporate membership at the Aberdeen Marina Club was worth about HK$1.25 million to HK$1.3 million, a decline of at least 43 per cent, said Ada Poon Lai-wan, sales division chief of Sandia Membership Service.
“Membership prices, like house prices, follow the trend of the Hang Seng Index, and there is usually a three- to six-month lag,” Ms. Poon said, adding that prices were still above those during the outbreak of severe acute respiratory syndrome.
Potential Membership Centre general manager Vincent Wai said potential buyers were holding back in hopes of further price falls.
“We are receiving more calls from buyers - as frequent as once every two days - to check the latest prices, showing that they really care about it,” he said. “However, they are anticipating lower prices to come.”
Mr. Wai said some expected a further 10 per cent reduction. This was in huge contrast to the situation before September, when corporations were willing to pay whatever sellers asked.
The cost of leasing certain corporate memberships had also fallen by nearly 30 per cent.
Agents are pessimistic about the outlook. Noblesse Membership Service’s managing director Ivan Chan expects prices to fall a further 15 per cent. “There are more corporations wanting to sell than wanting to buy,” he said. “And club memberships are luxury items for the upper and middle classes, who have been hit severely by the economic crisis.”
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Cost of joining elite clubs tumbles
Price of memberships falls by up to half as financial crisis hits companies, wealthy
Paggie Leung
9 February 2009
The price of second-hand club memberships has fallen by as much as half since the global financial crisis began to hit Hong Kong, and prices are expected to fall further.
Figures from agents who deal in memberships of Hong Kong’s exclusive private clubs, show that the market prices for memberships have declined on average by between 30 and 40 per cent in the past six months.
The number of sales has also halved.
“Similar to the property and stock markets, the trading of second-hand memberships has also been affected by the financial turmoil,” said Tony Chan Wai-hung, sales director at Everfine Membership Services.
“Some companies have cut their budgets or sacked staff, thus they no longer need the memberships. Some people are pessimistic about the [membership] market and the economy so they want to sell them ... or some just want money to recover losses in the stock market.”
Mr. Chan said some established clubs, such as the Hong Kong Cricket Club and the American Club, no longer took new members, and clubs usually limited the number of corporate or individual members to about 2,000, or even as few as 1,000. This had led to a second-hand trade in memberships.
Prices for memberships had soared since the Sars crisis in 2003 because of limited supply and strong demand, he said. Prices hit a peak in August last year, before the global financial crisis took its toll.
Mr. Chan said the price for an individual membership at the Discovery Bay Golf Club had fallen 41 per cent to HK$1.3 million from HK$2.2 million in August.
A corporate membership at the Aberdeen Marina Club was worth about HK$1.25 million to HK$1.3 million, a decline of at least 43 per cent, said Ada Poon Lai-wan, sales division chief of Sandia Membership Service.
“Membership prices, like house prices, follow the trend of the Hang Seng Index, and there is usually a three- to six-month lag,” Ms. Poon said, adding that prices were still above those during the outbreak of severe acute respiratory syndrome.
Potential Membership Centre general manager Vincent Wai said potential buyers were holding back in hopes of further price falls.
“We are receiving more calls from buyers - as frequent as once every two days - to check the latest prices, showing that they really care about it,” he said. “However, they are anticipating lower prices to come.”
Mr. Wai said some expected a further 10 per cent reduction. This was in huge contrast to the situation before September, when corporations were willing to pay whatever sellers asked.
The cost of leasing certain corporate memberships had also fallen by nearly 30 per cent.
Agents are pessimistic about the outlook. Noblesse Membership Service’s managing director Ivan Chan expects prices to fall a further 15 per cent. “There are more corporations wanting to sell than wanting to buy,” he said. “And club memberships are luxury items for the upper and middle classes, who have been hit severely by the economic crisis.”
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