Real Estate Investor Magazine South Africa June 2018 | Page 64

In the Lap of Luxury
Trend overview of South Africa’s Wealthy
T
he South African Wealth Report was recently published
by AfrAsia Bank and New World Wealth. The report
covers wealth, luxury, prime property, collectable and
wealth management trends in South Africa from 2007 to 2017,
with projections to 2027.
Unsurprisingly, Johannesburg (including Sandton) is ranked
first in the country in terms of GDP, accounting for 20% of the
country’s GDP. According to the research, total private wealth
held in South Africa in 2017 amounts to $722b. The average
South African individual has net assets of US$12,900 (wealth per
capita), which is the 2nd highest level in Africa, behind Mauritius.
South Africa is home to 43 600 HNWIs, each with net assets
of US$1 million or more; to 2 200 multimillionaires, each with
net assets of US$10 million or more; and 5 billionaires, each with
net assets of US$1 billion or more. The past year has seen an 8%
growth in the amount of HNWI in the country, facilitated by a
strengthening local currency.
At the end of 2017, real estate was the largest asset class for
HNWIs in South Africa (30% of total HNWI assets), followed
by equities (28%), business interests (21%), cash & bonds (15%),
and alternatives (6%). Local HNWI decreased their real estate
allocation during the review period from 33% in 2007 to 30%
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in 2017.
Analysing the source of South African HNWI’s wealth, fi-
nancial and professional services come out on top, accounting for
26,8%. Real estate and construction comes in second, at 19.7%.
Paarl, Franschhoek & Stellenbosch is the fastest growing
South African city/area for HNWIs, with numbers rising by 20%
over the past 10 years. HNWIs on the Garden Route and the
Whale Coast also performed well (mainly due to a trend of retir-
ing HNWIs moving there).