The South Africa Wealth Report
© New World Wealth. Page 1
ho-
The AfrAsia Bank
South Africa Wealth Report
Publication Date: April 2018
The South Africa Wealth Report
© New World Wealth. Page 2
TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................................ 2
LIST OF TABLES .................................................................................................................. 4
LIST OF FIGURES ................................................................................................................ 4
1 Introduction ................................................................................................................... 5
1.1 What is this Report About? ................................................................................................... 5
1.2 Notes and definitions............................................................................................................. 5
1.3 Sources .................................................................................................................................. 6
1.4 Why do we compile an SA wealth report? ........................................................................... 6
2 Wealth Sector Fundamentals ....................................................................................... 7
2.1 Regional landscape ............................................................................................................... 7
2.2 Political Review ...................................................................................................................... 8
2.3 Economic Review .................................................................................................................. 9
2.4 Benchmarking South Africa’s Wealth in Context .............................................................. 10
2.4.1 World statistics ................................................................................................................................... 10
2.4.2 Distribution of wealth in South Africa .................................................................................................. 10
2.4.3 HNWI wealth trends in South Africa .................................................................................................... 12
2.5 South Africa’s wealth scorecard and growth prospects ................................................... 13
3 Findings from HNWI Database ................................................................................... 15
3.1 Trend analysis ...................................................................................................................... 15
3.2 Breakdown by city ............................................................................................................... 16
3.3 Age distribution ................................................................................................................... 18
3.4 Industry breakdown ............................................................................................................. 19
3.5 Educational background ..................................................................................................... 20
3.6 Work title breakdown ........................................................................................................... 21
3.7 Top suburbs for the super-rich ........................................................................................... 22
3.8 Spotlight on billionaires ...................................................................................................... 23
4 Luxury sector in SA .................................................................................................... 24
4.1 Luxury cars .......................................................................................................................... 24
4.2 Luxury clothing & accessory brand stores ........................................................................ 26
4.3 Luxury department stores ................................................................................................... 27
4.4 Local luxury brands ............................................................................................................. 28
4.5 Luxury hotels ....................................................................................................................... 28
4.6 Luxury food stores & restaurants ....................................................................................... 29
5 Collectables: art and classic cars .............................................................................. 30
6 Investment trends of SA HNWIs ................................................................................ 32
6.1 Asset allocations ................................................................................................................. 32
6.2 Real estate ............................................................................................................................ 34
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6.3 Cash and bonds ................................................................................................................... 35
6.4 Equities ................................................................................................................................. 35
6.5 Business interests ............................................................................................................... 36
6.6 Analysis of Foreign Investments ........................................................................................ 36
7 The Wealth Management Sector in South Africa ...................................................... 37
7.1 Wealth managers & private banks ...................................................................................... 37
7.2 Family offices ....................................................................................................................... 38
7.3 Best ways of contacting HNWIs .......................................................................................... 39
8 Prime property index .................................................................................................. 40
8.1 SA square meter prices for suburbs and streets ............................................................... 41
8.2 Top hotspots for R20 million homes in SA ........................................................................ 42
8.3 The next hotspots for R20 million homes in SA ................................................................ 45
8.4 Luxury residential estates ................................................................................................... 46
9 Appendix ...................................................................................................................... 47
9.1 Regulatory Environment in South Africa ........................................................................... 47
9.2 Regulations on taxes ........................................................................................................... 47
9.3 Exchange controls and rules on overseas bank accounts ............................................... 49
10 About the Sponsor / Author ....................................................................................... 50
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LIST OF TABLES
Table 1: South Africa: HNWI wealth band definitions .......................................................................................................................................... 5
Table 2: South Africa: Cities ranked by GDP contribution, 2017......................................................................................................................... 7
Table 3: South Africa: City wealth breakdown, 2017 ......................................................................................................................................... 16
Table 4: South Africa: HNWIs – City performance, 2007 - 2017 ....................................................................................................................... 17
Table 5: South Africa: HNWIs – Distribution by area of study, 2017................................................................................................................. 20
Table 6: South Africa: HNWIs – Distribution by university, 2017 ...................................................................................................................... 20
Table 7: South Africa: HNWIs – Distribution by level of education, 2017 ......................................................................................................... 21
Table 8: South Africa: HNWIs – Distribution by work title, 2017 ....................................................................................................................... 21
Table 9: South Africa: Most popular suburbs in Cape Town for multimillionaires, 2017 .................................................................................. 22
Table 10: South Africa: Most popular suburbs in Johannesburg for multimillionaires, 2017 ........................................................................... 23
Table 11: South Africa: Top selling luxury cars, 2017 ....................................................................................................................................... 24
Table 12: South Africa: Popular SUVs for HNWIs, 2017 ................................................................................................................................... 25
Table 13: South Africa: Popular sports cars for HNWIs, 2017 .......................................................................................................................... 25
Table 14: South Africa: Luxury Brand Stores, 2017 .......................................................................................................................................... 26
Table 15: South Africa: Upcoming Luxury Brand Stores, 2017 ......................................................................................................................... 27
Table 16: South Africa: Luxury Department Stores, 2017 ................................................................................................................................. 27
Table 17: South Africa: Luxury Food Stores, 2017 ............................................................................................................................................ 29
Table 18: South Africa: Popular classic cars for HNWIs, 2017 ......................................................................................................................... 31
Table 19: South Africa: HNWI Asset Allocations (%), 2007−2027 .................................................................................................................... 33
Table 20: South Africa: The largest wealth managers by local AuM, 2017 ...................................................................................................... 37
Table 21: South Africa: Major foreign wealth management companies operating in SA, 2017 ....................................................................... 38
Table 22: South Africa: Most expensive streets and suburbs, price per square meter, 2017 .......................................................................... 41
Table 23: South Africa: Most exclusive suburbs in Cape Town (R20m homes), 2017 .................................................................................... 42
Table 24: South Africa: Most exclusive suburbs in Johannesburg (R20m homes), 2017 ................................................................................ 42
Table 25: South Africa: Most exclusive towns in South Africa (R20m homes), 2017....................................................................................... 43
LIST OF FIGURES
Figure 1: South Africa: Map of country ................................................................................................................................................................. 7
Figure 2: South Africa: Asset Price Performance (US$ terms), 2007–2017 ..................................................................................................... 11
Figure 3: South Africa: HNWI Performance, 2007–2027 ................................................................................................................................... 13
Figure 4: South Africa: HNWIs – Growth Factor Correlation, 2007–2017 ........................................................................................................ 15
Figure 5: South Africa: HNWIs – Age Distribution, 2017 ................................................................................................................................... 18
Figure 6: South Africa: HNWIs – Distribution by Industry, 2017........................................................................................................................ 19
Figure 7: South Africa: HNWI Asset Class Composition, 2007–2027 ............................................................................................................... 32
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1 Introduction
1.1 What is this Report About?
The report covers wealth, luxury, prime property, collectable and wealth management trends in South Africa
from 2007 to 2017, with projections to 2027.
Table 1: South Africa: HNWI wealth band definitions
Wealth group
Definition
Billionaires
Billionaires are those individuals living in SA with wealth of US$1 billion or more.
Multi-millionaires
Those individuals living in SA with wealth of US$10 million or more.
Millionaires (HNWIs)
Those individuals living in SA with wealth of US$1 million or more.
Mass Affluent
Those individuals living in SA with wealth of between US$100,000 and US$1 million.
Source: New World Wealth
1.2 Notes and definitions
“Wealth” refers to the net assets of a person. It includes all their assets (property, cash, equities,
business interests) less any liabilities.
“Collectables” include any luxury item that holds its value reasonably well over time (examples: art,
classic cars).
“Assets under Management” or “AuM” refers to the market value of all the funds being managed by a
wealth management company on behalf of its clients.
“Business Interests” refer to local holdings in businesses that HNWI is or was actively involved in
(example: Bill Gates shares in Microsoft).
Figures mentioned in the report are from New World Wealth unless otherwise stated.
The “review period” refers to period from the end of 2007 to the end of 2017.
The “forecast period” refers to period from the end of 2017 to the end of 2027.
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1.3 Sources
Sources include:
The New World Wealth HNWI database, which includes detailed profiles on over 5,000 South African
HNWIs.
Regular interviews with intermediaries (brokers, wealth managers, financial advisors, property agents,
migration experts, travel agents and art & classic car dealers).
Property registers and property sales statistics.
Income distribution stats.
Stock market statistics.
Tracking of HNWI movements in the media.
1.4 Why do we compile an SA wealth report?
In our view, wealth is a far better measure of the financial health of an economy than GDP. Reasons for this
include:
In certain countries, a large portion of GDP flows to the government and therefore has little impact on
private wealth creation (examples: Bahrain, Kuwait).
GDP counts items multiple times (for instance, if someone is paid $100 for a product/service and they
then pay someone else that $100 for another product/service, then that adds $200 to a country’s GDP,
even though only $100 has been produced at the start).
GDP disregards income levels in a country.
GDP ignores the efficiency of the local banking sector and the local stock market at retaining wealth in
a country.
Wealth figures, on the other hand, do not have any of these limitations, making them a far better gauge of the
financial health of an economy than GDP figures.
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2 Wealth Sector Fundamentals
2.1 Regional landscape
There are around 56 million people living in South Africa. Johannesburg (including Sandton) is the economic
powerhouse of South Africa, accounting for over 20% of the county’s GDP.
Table 2: South Africa: Cities ranked by GDP contribution, 2017
Rank
City
State/Province
1
Johannesburg (incl. Sandton)
Gauteng
2
Cape Town
Western Cape
3
Durban (incl. Umhlanga)
KwaZulu-Natal
4
Pretoria
Gauteng
5
Port Elizabeth
Eastern Cape
Source: New World Wealth
Figure 1: South Africa: Map of country
Source: CIA Factbook
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2.2 Political Review
South Africa has been democratic since 1994. General elections are held every five years. Major political
parties in the country include:
The African National Congress (ANC), which has won every general election since 1994 (with
majorities of over 60%). The ANC is a national liberation movement founded in 1912. Cyril
Ramaphosa is the current president of the ANC and formers leaders include Nelson Mandela, Oliver
Tambo, Albert Lutuli, Thabo Mbeki and Jacob Zuma. In the 2014 general election, the ANC received
62% of the national vote and won majorities in eight of the nine provinces.
The Democratic Alliance (DA), which is the governing party in the Western Cape Province, and the
official opposition at a national level. The party traces its roots to the anti-apartheid movement of the
1970s and 1980s, during which time it was known as the Progressive Party. Mmusi Maimane is the
current leader of the DA and former leaders include Helen, Zille, Tony Leon and Helen Suzman. The
DA won 22% of the national vote in the 2014 general election and 54% of the vote in the Western
Cape.
The Economic Freedom Fighters (EFF), which was formed in 2013 by former ANC Youth League
leader Julius Malema. The party won 6% of the national vote in the 2014 general election.
The next general election will be held in 2019.
It should be noted that in the 2017 municipal elections, the DA won an improved 27% of the national vote
and gained majorities in 4 of the 5 big metros including Johannesburg, Pretoria, Port Elizabeth and Cape
Town. The only major metro that they lost was Durban.
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2.3 Economic Review
South Africa is the 35th largest economy in the world (measured by current GDP).
Financial services is the largest domestic sector, accounting for around 20% of South African GDP, followed
by manufacturing (12%) and basic materials (10%). ‘Basic materials’ includes mining (7% of GDP) and
agriculture (3%). Notably, mining’s contribution has fallen from 21% of GDP in 1970 - source: Stats SA.
The country’s main export partners over the past year were: China (10% of exports), the United States (8%),
Germany (8%), Botswana (5%), Namibia (5%), Japan (5%), the UK (5%) and India (5%). Major exports
include: cars & trucks (12% of exports), platinum (9%), coal (6%), iron ore (5%) ferroalloys (5%) and diamonds
(3%) - source: Observatory of Economic Complexity.
The South African economy performed poorly over the past 10 years. South African US$ GDP per capita
declined by 13%, from US$5,990 in 2007 to around US$5,200 in 2017 (estimate for 2017). It was up and
down during the period - it peaked at US$7,980 in 2011 - source: Worldbank.
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2.4 Benchmarking South Africa’s Wealth in Context
2.4.1 World statistics
Worldwide stats (at the end of 2017):
Total private wealth held worldwide amounts to approximately US$215 trillion.
The average individual has net assets of US$28,400 (wealth per capita).
There are approximately 15.2 million HNWIs in the world, each with net assets of US$1 million or more.
There are approximately 584,000 multi-millionaires in the world, each with net assets of US$10 million
or more.
There are 2,252 billionaires in the world, each with net assets of US$1 billion or more.
2.4.2 Distribution of wealth in South Africa
South Africa stats (at the end of 2017):
Total private wealth held in SA amounts to approximately US$722 billion. Around US$306 billion of this
is held by HNWIs.
The average South African individual has net assets of US$12,900 (wealth per capita), which is the 2
nd
highest level in Africa, behind Mauritius.
SA is home to 43,600 HNWIs, each with net assets of US$1 million or more.
SA is home to 2,200 multimillionaires, each with net assets of US$10 million or more.
SA is home to 5 billionaires, each with net assets of US$1 billion or more.
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The following chart summarizes how major wealth drivers have performed over the past 10 years in US dollar
terms.
As is evident, South African US$ wealth was negatively influenced by a significant depreciation of the Rand
against the US dollar during the period. GDP per capita was also down in US$ terms.
Figure 2: South Africa: Asset Price Performance (US$ terms), 2007–2017
*includes foodstuffs and raw materials (excl. gold and oil)
Sources: Various: New World Wealth, EIU, The Economist, Worldbank
-44,2%
-13,1%
-12,1%
-10,8%
-7,4%
-6,5%
17,2%
28,0%
43,0%
88,2%
160,0%
-80,0% -30,0% 20,0% 70,0% 120,0% 170,0% 220,0%
US$/LC
Local GDP per capita
World Hedge Fund Index
Local Prime Property Index
General Commodities*
Oil
Local Stock Market
Local Fine Art Index
MSCI World Index
Gold
Classic Car Index
US dollar indices
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2.4.3 HNWI wealth trends in South Africa
2017 performance
2017 was a solid year for South African HNWIs – HNWI volumes in the country rose by 8% during the year,
reaching 43,600 by the end of 2017. This growth rate was in line with the rise in overall wealth held in the
country – total private wealth held in South Africa rose from US$670 billion at the end of 2016 to US$722
billion at the end of 2017, whilst HNWI wealth rose from US$284 billion to US$306 billion.
The rise was facilitated by a strengthening local currency – the US$ exchange rate went from R13.70/US$ at
the end of 2016 to R12.30/US$ at the end of 2017. The JSE all share index was also up significantly during
the year (by 30% in US$ terms).
Review period performance (2007 – 2017)
Performance over the past 10 years was less impressive with HNWI numbers rising by only 2% over the 10
year period between 2007 and 2017. It should however be noted that this period takes into account the global
financial crisis in 2008 which damaged wealth numbers in most countries.
SA’s performance over the 10 year period was negatively impacted by:
A declining currency – the Rand depreciated significantly against the US$ from R6.90/US$ at the end
of 2007 to R12.30/US$ at the end of 2017.
A sluggish property market (in US$ terms).
Poor performance of key sectors, most notably mining.
SA’s performance was positively impacted by:
The JSE all share index, which was up by 17% during the 10 year period (in US$ terms).
Strong growth in the local professional services sector (law firms, consultancies).
The MSCI World Index (global equity market index), which was up by 43% over the 10 year period
(in US$ terms). Many South African HNWIs have foreign equity holdings so this has an impact.
Forecast period performance (2017 – 2027)
Solid HNWI growth is expected over the next 10 years. The number of South African HNWIs is forecast to
grow by 28%, to reach approximately 56,000 by 2027.
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Figure 3: South Africa: HNWI Performance, 2007–2027
Source: New World Wealth
2.5 South Africa’s wealth scorecard and growth prospects
Despite being only the fifth-largest country in Africa in terms of population and ninth-largest by land area,
South Africa is by far the most advanced and richest country on the continent.
South Africa has over twice as many millionaires (HNWIs) as any other African country. Things that attract
and keep HNWIs in SA include:
Lifestyle aspects: wildlife, beaches, weather and scenery.
A good private healthcare system.
Top class private schools for their children.
Top class shopping centers (examples: Sandton City, Gateway, Montecasino, V&A and Hyde Park).
English speaking country.
Fully developed luxury market, where most of the major luxury brands are available.
Large number of luxury holiday destinations within country (examples: Kruger Park, Cape Town,
Umhlanga, Ballito, etc.).
42,8
34,8
41
48,6
44,8
48,2
46,9
46,8
38,5
40,4
43,6
56,0
0
10
20
30
40
50
60
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2027F
HNWI volumes (000's)
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Luxury food stores such as Woolworths, which appeal to wealthy consumers.
Well established luxury areas (Camps Bay, Hyde Park, Westcliff, Umhlanga etc.)
Over 100 luxury residential estates.
Efficient private security companies including: CSS Tactical, G4S, Fidelity ADT and CAP Security,
which help keep affluent neighborhoods safe.
Going forward, South Africa has strong fundamentals for wealth growth including:
A well-developed wealth management, fund management and banking system.
A large free media which helps disseminate reliable information to investors. This sets South Africa
apart from most other African markets.
One of the 20 biggest stock exchanges in the world. Also, the JSE has been one of the fastest growing
stock markets worldwide over the past 25 years (in terms of market cap growth).
South Africa is a potential hub for doing business in the rest of Africa.
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3 Findings from HNWI Database
Our South African model has been constructed using underlying data from the New World Wealth HNWI
Database. The demographic details in this section are based on a sample of over 5,000 local HNWIs and
results are based off a 95% confidence interval.
3.1 Trend analysis
Growth in the wealth of HNWIs is linked to a number of factors including the country’s GDP, the local real
estate market and the local stock market. As is evident from the below figure, the growth of South African
HNWI wealth is closely linked to US$ GDP per capita. Note: all indices are in US$ terms.
Figure 4: South Africa: HNWIs – Growth Factor Correlation, 2007–2017
Source: Various: New World Wealth, The Economist, Worldbank
0
20
40
60
80
100
120
140
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Index (US$)
HNWI Wealth Local Prime Property Index GDP per capita Local stock market
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3.2 Breakdown by city
As evidenced in the below table, Johannesburg is home to the largest portion of South Africa’s wealth.
Table 3: South Africa: City wealth breakdown, 2017
City / Area
Total wealth (US$bn)
Residents ($1m+)
Residents ($10m+)
Johannesburg
276
18 400
970
Cape Town
155
8 300
490
Durban, Ballito & Umhlanga
55
3 400
210
Paarl, Franschhoek & Stellenbosch
54
3 200
150
The Garden Route
52
3 000
100
Pretoria
48
2 800
120
The Whale Coast
24
800
50
The Sunshine Coast
15
400
40
Pietermaritzburg & Natal Midlands
7
200
30
Bloemfontein
3
100
20
Other
33
3 000
20
Total South Africa
722
43 600
2 200
Note: HNWIs numbers rounded to nearest 100. Only includes people living in each area.
Source: New World Wealth
Notes:
Johannesburg: Our figures for Johannesburg include Sandton.
The Garden Route: Stretches from Mossell Bay to Storms River on the South Coast. Popular
retirement destination. Notable towns on the route include: Mossell Bay, George, Knysna,
Plettenberg Bay and Wilderness.
The Whale Coast: Area between Cape Town and the Garden Route. Notable towns on the Whale
Coast include Rooi Els, Kleinmond, Hermanus, Gansbaai, Pringle Bay and Bettys Bay.
The Sunshine Coast: Area around Port Elizabeth. Includes Port Elizabeth, Kenton, St Francis Bay,
Grahamstown and Port Alfred.
Note: This table only includes resident wealth. The likes of Cape Town and the Garden Route are also popular
second home hotspots for the wealthy.
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The following table lists these same areas by HNWI growth.
As reflected, 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 retiring HNWIs moving there).
Johannesburg performed relatively poorly. A large number of Johannesburg millionaires moved to other parts
of the country. Johannesburg prime property prices also performed poorly relative to the rest of the country.
Table 4: South Africa: HNWIs – City performance, 2007 - 2017
City / Area
HNWI growth %, 2007 - 2017
Residents ($1m+), 2017
Johannesburg
-4%
18 400
Cape Town
3%
8 300
Durban, Ballito & Umhlanga
8%
3 400
Paarl, Franschhoek & Stellenbosch
20%
3 200
The Garden Route
14%
3 000
Pretoria
2%
2 800
The Whale Coast
10%
800
The Sunshine Coast
9%
400
Pietermaritzburg & Natal Midlands
2%
200
Bloemfontein
1%
100
Other
2%
3 000
Total South Africa
2%
43 600
Note: HNWIs numbers rounded to nearest 100. Only includes people living in each area.
Source: New World Wealth
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3.3 Age distribution
Age breakdown
The average age of HNWIs in South Africa is 57 years. This is slightly above the worldwide average. As
reflected below, a large portion of SA HNWIs are over 60 years old.
Figure 5: South Africa: HNWIs – Age Distribution, 2017
*Numbers may not add to 100% due to rounding
Source: New World Wealth
6% 29% 31%
34%
40 and under 41-50 51-60 Above 60
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3.4 Industry breakdown
Financial & professional services is the main industry from which South African HNWIs have acquired their
wealth. Real estate & construction is also a big one.
Figure 6: South Africa: HNWIs – Distribution by Industry, 2017
Notes:
Financial & professional services includes banks, law firms, accountancies, fund managers and wealth managers.
Basic Materials includes agriculture and mining.
FMCG includes food distribution, food processing and food retail.
Retail includes all forms of retail, with the exception of food retail which is under FMCG.
Manufacturing includes automotive, textiles, machinery, electrics, chemicals and shipbuilding.
Tech & Telecoms includes software, internet, hardware and telecoms.
Healthcare includes pharmaceuticals, doctors, hospitals, nursing homes and health insurance.
Source: New World Wealth
The fastest growing sectors for South African HNWIs over the past 10 years were financial services (banks)
and professional services (law firms, consultancies etc.). Both are bunched together in the above chart.
1,3%
2,5%
3,2%
3,8%
5,7%
6,4%
6,4%
7,0%
8,3%
8,9%
19,7%
26,8%
0% 5% 10% 15% 20% 25% 30%
Hotels & Leisure
Transport & Logistics
Manufacturing
Media
Healthcare
Other
FMCG
Retail
Basic Materials
Tech & Telecoms
Real Estate & Construction
Financial & Prof. Services
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3.5 Educational background
The following table examines the most common degrees and certifications held by South African HNWIs.
Table 5: South Africa: HNWIs – Distribution by area of study, 2017
Type of degree / area of study
% of HNWIs, 2017
Law (LLB, LLM)
28%
Finance & Economics (MBA, B.Com, Business Science, CFA)
21%
Accounting (Chartered Accountant)
12%
Computers and Sciences (B.Sc.)
6%
Medicine
4%
Engineering
4%
Actuarial
3%
Other
22%
Total
100%
Note: Refers to the last degree/certification achieved by the HNWI.
Source: New World Wealth
The following table provides a breakdown the top universities for producing South African HNWIs.
Table 6: South Africa: HNWIs – Distribution by university, 2017
University
% of HNWIs, 2017
University of the Witwatersrand (WITS)
22%
University of Cape Town (UCT)
19%
Stellenbosch University
12%
University of South Africa (UNISA)
10%
University of Pretoria
6%
Rhodes University
5%
Rand Afrikaans University / University of Johannesburg
4%
US universities (Harvard, Yale, MIT etc.)
4%
UK universities (Oxford, Cambridge etc.)
3%
Other
15%
Total
100%
Note: Refers to last university attended by the HNWI.
Source: New World Wealth
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The following table examines the level of education of HNWIs in SA.
Table 7: South Africa: HNWIs – Distribution by level of education, 2017
Level of education
% of HNWIs, 2017
Under Graduate Only
68%
Post Graduate
27%
High School Only
5%
Total
100%
Source: New World Wealth
3.6 Work title breakdown
The following table provides a breakdown of the work titles of HNWIs living in South Africa.
Table 8: South Africa: HNWIs – Distribution by work title, 2017
Title
% of HNWIs, 2017
Director
40%
Managing Director
16%
Chief Executive Officer
11%
Chairman
9%
Partner
8%
Chief Financial Officer
3%
Financial Director
3%
Other
10%
Total
100%
Source: New World Wealth
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3.7 Top suburbs for the super-rich
The following two tables provide a breakdown of the top suburbs for super-wealthy South Africans to live.
Note: this table refers to multi-millionaires (individuals with net assets of US$10 million or more).
Table 9: South Africa: Most popular suburbs in Cape Town for multimillionaires, 2017
Suburb
Residents ($10m+)
Camps Bay & Bakoven
80
City bowl*
70
Bishopscourt
40
Constantia & Tokai
40
Clifton
30
Bantry Bay
30
Fresnaye
30
Somerset West
30
Greenpoint
20
Granger Bay & Mouille Point
20
Llandudno
20
Seapoint & Three Anchor Bay
20
Noordhoek
10
Hout Bay
10
Gordons Bay & Strand
10
Other
30
Total CT
490
Note: Rounded to nearest 10. Only includes people living in each area.
*incl. Higgovale, Oranjezicht, Tamboerskloof and V&A Marina.
Source: New World Wealth
Note: This table only includes resident multi-millionaires that live in these suburbs. The likes of Camps Bay,
Clifton, Bantry Bay, Fresnaye, Llandudno and Seapoint are also popular second home hotspots for the
wealthy.
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Table 10: South Africa: Most popular suburbs in Johannesburg for multimillionaires, 2017
Suburb
Residents ($10m+)
Houghton
130
Sandhurst
120
Hyde park
110
Bryanston
90
Westcliff
50
Park Town
20
Saxonwold
20
Other
430
Total JHB
970
Note: Rounded to nearest 10. Only includes people living in each area.
Source: New World Wealth
3.8 Spotlight on billionaires
South Africa is home to five billionaires (each with net assets of US$1 billion or more).
It should be noted that an additional 9 South African born billionaires have left the country and are therefore
no longer included in our figures i.e. we only include people that actually live in South Africa. So, in total 14
South African born individuals could be classified as billionaires.
Note: we do not give out the names of these individuals. Our HNWI database is purely used for market
research purposes.
The South Africa Wealth Report
© New World Wealth. Page 24
4 Luxury sector in SA
The SA luxury sector generated revenue of approximately US$2.2 billion in 2017 (down slightly from US$2.3
billion in 2016). This figure includes: luxury cars, luxury clothing & accessories, luxury watches, private jets,
yachts and luxury hotels & lodges. Luxury hotels are the largest component.
Recent trends:
The luxury clothing sector in SA performed poorly in 2017, possibly due to increased competition
from semi-luxury and premium brands.
Luxury car sales were also down in 2017 compared to 2016. However, the luxury SUV space is still
performing well - Porsche Cayenne, Range Rover, BMW X6, Mercedes GLE etc.
Luxury hotel revenue in SA was up slightly in 2017 compared to 2016. This was assisted by the
easing of visa restrictions on foreign visitors.
The super-luxury watch segment is still performing well in SA. Notably, this segment has been
growing steadily over the past few years. Examples of super-luxury watches include: Patek Philippe,
Franck Muller, Breguet, Vacheron Constantin, Ulysse Nardin, Blancpain, Audemars Piguet, Roger
Dubius, A Lange & Sohne, Richard Mille, Greubel Forsey and FP Journe.
4.1 Luxury cars
Luxury car brands with dealerships in SA are listed below, ranked by revenue.
Table 11: South Africa: Top selling luxury cars, 2017
Brand ranked by SA revenue
Dealership locations
Porsche
Sandton, Cape Town, Umhlanga
Ferrari
Sandton, Cape Town, Durban
Bentley
Sandton
Rolls Royce
Sandton
Aston Martin
Sandton, Cape Town
Lamborghini
Sandton, Cape Town
Mclaren
Sandton, Cape Town
Source: New World Wealth, NAAMSA
The South Africa Wealth Report
© New World Wealth. Page 25
Luxury SUVs are especially popular with SA’s super-rich. Reasons for their popularity include:
High road clearance. SUVs handle potholes and bad roads better than luxury sedans and sports cars.
Safety aspects.
Space for children.
Useful for holidays – off road, game reserves etc.
Popular models are listed below.
Table 12: South Africa: Popular SUVs for HNWIs, 2017
Model
Price US$
Porsche Cayenne Turbo
110 000
Range Rover 5.0L V8
100 000
BMW X6
70 000
Mercedes GLE Coupe
70 000
Source: New World Wealth
The following sports cars are also popular.
Table 13: South Africa: Popular sports cars for HNWIs, 2017
Model
Price US$
Rolls-Royce Phantom
420 000
Ferrari F12 Berlinetta
310 000
Rolls Royce Ghost
295 000
Ferrari 458 Italia
240 000
Ferrari California
205 000
Bentley Continental
200 000
Aston Martin DB9
198 000
Porsche 911 Turbo
160 000
Mercedes-Benz AMG SL
140 000
Porsche 911 Carrera 4
90 000
Source: New World Wealth
The South Africa Wealth Report
© New World Wealth. Page 26
4.2 Luxury clothing & accessory brand stores
A large number of exclusive clothing & accessory brand stores were put up in SA between 2002 and 2007
during the global consumer boom period. Most of them are based in major shopping centers including:
Sandton City and Hyde Park in Johannesburg, the V&A Waterfront in Cape Town and Gateway in Umhlanga.
Table 14: South Africa: Luxury Brand Stores, 2017
Brand (ranked by no. of stores)
Specialty
No. of stores in country
L'Occitane
Bath & grooming products
16
Hugo Boss
Mens clothing
12
Lacoste
Mens clothing
9
Louis Vuitton
Clothing & accessories
2
Burberry
Clothing & accessories
2
Gucci
Clothing & accessories
2
Paul Smith
Mens clothing
2
Paul & Shark
Mens clothing
1
Thomas Pink
Clothing & accessories
1
Salvatore Ferragamo
Clothing & accessories
1
Bally
Clothing & accessories
1
Dolce & Gabbana
Clothing & accessories
1
Jimmy Choo
Womans shoes
1
Prada
Clothing & accessories
1
Zegna
Mens clothing
1
Kiton
Mens clothing
1
Note: excludes watch stores and jewelry stores.
Source: New World Wealth
Notably, no new luxury clothing & accessory brands entered the SA market in 2017. However, some existing
brands such as L'Occitane opened new stores in SA during the year.
The South Africa Wealth Report
© New World Wealth. Page 27
The following luxury brands are likely to open brand stores in SA over the next decade.
Table 15: South Africa: Upcoming Luxury Brand Stores, 2017
Brand (alphabetical)
Specialty
Canali
Mens clothing
Chanel
Clothing & accessories
Christian Dior
Clothing & accessories
Christian Louboutin
Womans shoes
Hermes
Clothing & accessories
LK Bennett
Womans accessories
Mulberry
Clothing & accessories
Source: New World Wealth
4.3 Luxury department stores
There are also a number of South African department stores that stock luxury brands. Notables are listed
below.
Table 16: South Africa: Luxury Department Stores, 2017
Ranked by number of stores
Specialty
No. of Stores
Grays
Mens clothing
8
Luminance
Womans clothing & accessories
2
Note: excludes watch stores and jewelry stores.
Source: New World Wealth
The South Africa Wealth Report
© New World Wealth. Page 28
4.4 Local luxury brands
The South African luxury goods market is dominated by foreign brands. However, there are a few local SA
brands that make luxury and semi-luxury goods. They include:
Ardmore Ceramics
Avoova
Carrol Boyes
Porcupine Ceramics
RainAfrica (bath & grooming products)
Robertson & Caine (boat builders)
We expect this sector to grow strongly over the next 10 years.
4.5 Luxury hotels
A large portion of SA luxury sector revenue comes from luxury hotels and lodges.
Major SA destinations for wealthy people include: Kruger Park area, Cape Town, Umhlanga and the Garden
Route.
Popular SA hotels for the world’s wealthy include: the Lost City, the 12 Apostles Hotel & Spa, the One & Only,
the Table Bay, the Sandton Sun, the Mount Nelson, the Michael Angelo, the Beverley Hills, the Oyster Box,
the Westcliff and the Cape Grace. Popular SA game lodges for the super-rich include: Singita, Ngala,
Bushmans Kloof, Royal Malewane, Phinda and Londolozi.
There are also a large number of small boutique hotels in SA that appeal to wealthy people. Examples include:
Ellerman House, La Residence, Franschhoek Country House, Birkenhead House and the Plettenberg.
The South Africa Wealth Report
© New World Wealth. Page 29
4.6 Luxury food stores & restaurants
Although not included in our figure of US$2.2 billion, luxury food is sometimes included as another luxury
item.
Luxury food retailers
This sector is well developed in SA, especially when compared to the rest of Africa and other major emerging
markets such as India and Brazil. However, one company dominates the local market, namely, Woolworths.
Woolworths is modeled on and part-owned by Marks & Spencer in the UK.
Table 17: South Africa: Luxury Food Stores, 2017
Brand (ranked by number of stores)
No. of Stores
Woolworths Food
400+
Bread Basket
6
Jacksons Real Food
1
Thrupps
1
Source: New World Wealth
Top-end restaurants
South Africa is home to a number of top-end Michelin star level restaurants, such as: La Colombe in
Constantia and the Tasting Room in Franschhoek. There are also a number of more mainstream restaurants
that attract a large number of wealthy people including: The Butcher Shop in Sandton and Beluga in
Greenpoint.
Notably, Franschhoek is considered to be the “fine food capital” of South Africa with over 20 highly rated
restaurants in the small town.
The South Africa Wealth Report
© New World Wealth. Page 30
5 Collectables: art and classic cars
Collectables are a growing segment in SA. Collectables include any luxury item that holds its value reasonably
well over time. Prominent examples include: art, classic cars, fine wine and stamps. Note: Collectables do
not include yachts, private jets and new cars as these items are unlikely to hold their value.
Art
The global top-end art market is valued at around US$75 billion. African art accounts for around US$1 billion
of this, with US$450 million (R5.5 billion) held in South Africa specifically.
Leading South African artists (in terms of price) include:
Irma Stern - Currently the most valuable South African artist. Fetches up to R30 million per painting.
Average price of around R5 million.
Maggie Laubser - Currently fetches up to R5 million per painting. Average price of around R600,000.
We expect the value of her paintings to rise heavily going forward, possibly matching Irma Stern
prices in the near future.
JH Pierneef - Average price of around R800,000 per painting. Can fetch up to R20 million.
Alexis Preller - Average price of around R600,000 per painting. Can fetch up to R10 million.
Gerard Sekoto - Average price of around R400,000 per painting. Can fetch up to R5 million.
Hugo Naude - Average price of around R300,000 per painting. Can fetch up to R2 million.
William Kentridge - Average price of around R800,000 per painting. Can fetch up to R5 million.
John Meyer - Average price of around R300,000 per painting. Can fetch up to R3 million.
Our picks for the future include (i.e. expected to fetch similar prices to artists above in the near future):
Adrian Boshoff
Stefan Ampenberger
Branko Dimitrov
Roberto Vaccaro (sculpture)
Portchie
Isabel le Roux
The majority of major art galleries are located in Johannesburg, Cape Town, Pretoria and Stellenbosch. Major
dealers include Strauss & Co and Stephan Welz.
The South Africa Wealth Report
© New World Wealth. Page 31
According to our in-house indices, South African fine art prices have risen by 28% over the past 10 years (in
US$ terms). Global fine art prices have risen by 12% over the same period.
Wheels
The global classic car market is valued at around US$5 billion. According to our in-house indices, classic car
prices rose by a strong 160% over the past 10 years (in US$ terms), making it the best performing investment
class for wealthy people globally. Local classic car auctions take place in Johannesburg, Cape Town and
Knysna on a regular basis. Popular classic cars for SA HNWIs are listed below.
Table 18: South Africa: Popular classic cars for HNWIs, 2017
Ranked by price
Years produced
Price US$*
Ferrari 250 GTO
1960s
24 000 000
Ferrari 250 GT California Spider
1960s
20 000 000
Ferrari 250 Testa Rossa
1950s
18 000 000
Bugatti Type 41 Royale
1930s
16 000 000
Porsche 917
1970s
10 000 000
Ferrari 166 Barchetta
1950s
9 000 000
McLaren F1
1990s
8 000 000
Porsche 550 Spyder
1950s
2 000 000
Mercedes Gullwing 300sl
1950s
1 800 000
Porsche 959
1980s
1 500 000
Aston Martin DB4
1950s
1 400 000
Aston Martin DB5
1960s
1 100 000
Ferrari F40
1990s
1 000 000
Lamborghini Miura
1970s
800 000
Lamborghini Countach
1980s
500 000
Jaguar E Type
1960s
300 000
Ferrari Dino
1970s
260 000
Porsche 911
1960s
130 000
*US$ price if car in good and working condition.
Source: New World Wealth
The South Africa Wealth Report
© New World Wealth. Page 32
6 Investment trends of SA HNWIs
6.1 Asset allocations
New World Wealth defines wealth as the net value of assets, including both financial holdings and tangible
assets. As such, and in the interest of providing the most comprehensive analysis of the wealth of South
African HNWIs, we have calibrated the total wealth held by HNWIs across five major asset classes:
alternatives, real estate, cash & bonds, equities and business interests.
The statistics in this section are based on a combination of surveys conducted by New World Wealth on
wealth management companies, fund management companies and individual HNWIs in South Africa.
Figure 7: South Africa: HNWI Asset Class Composition, 2007–2027
Source: New World Wealth
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%).
20,4%
20,7%
21,3%
22,6%
28,2%
28,0%
18,0%
15,2%
15,0%
33,2%
29,9%
29,0%
5,8%
6,0%
6,7%
0%
20%
40%
60%
80%
100%
2007 2017 2027
Alternatives
Real Estate
Cash & Bonds
Equities
Business Interests
The South Africa Wealth Report
© New World Wealth. Page 33
Table 19: South Africa: HNWI Asset Allocations (%), 2007−2027
Asset Class
2007
2017
2027
Alternative investments
3,8%
3,4%
3,5%
Commodities
1,4%
1,7%
1,8%
Collectables
0,6%
1,0%
1,4%
Total alternatives
5,8%
6,0%
6,7%
Local Property
32,0%
28,6%
26,0%
Foreign property
1,2%
1,3%
3,0%
Total real estate
33,2%
29,9%
29,0%
Local cash & bonds
13,2%
9,0%
8,0%
Foreign cash & bonds
4,8%
6,2%
7,0%
Total cash & bonds
18,0%
15,2%
15,0%
Local equities
16,1%
18,8%
16,0%
Foreign equities
6,6%
9,4%
12,0%
Total equities
22,6%
28,2%
28,0%
Business interests (local)
20,4%
20,7%
21,3%
TOTAL
100,0%
100,0%
100,0%
Source: New World Wealth
As reflected, equities recorded the strongest growth over the review period, whilst real estate and cash were
the worst performing asset classes.
The South Africa Wealth Report
© New World Wealth. Page 34
6.2 Real estate
Residential property performance
According to our in-house prime property indices, South Africa’s residential property market performed poorly
over the review period (2007 to 2017) with average prices declining by 11% in US$ terms.
Note: our in-house prime property indices aggregate sq meter price growth in the main prime areas in SA (i.e.
Clifton, Bantry Bay, Bishopscourt, Sandhurst, Hyde Park, Houghton, Umhlanga and Plettenberg Bay).
Possible reasons for the 11% drop:
There was a significant depreciation of the Rand against the US dollar. In Rand terms, prime prices
were up during the 10 year period, by around 60%.
New visa restrictions which made it difficult for foreign buyers to stay in SA for more than 3 months
at a time. This deterred foreigners from buying homes in SA.
High agent commissions of up to 7.5% and high property transfer duties of up to 13%.
Increased utility bills (electricity & water) and levies, which have increased by more than three times
over the 10 year period. This has discouraged people from buying property and forced many people
to downsize.
Increased difficulty in getting mortgages following the global financial crisis. Bank and SARS approval
often takes a long time (up to 6 months).
Prior to the review period
It should be noted that prior to 2000, South African property prices were well below worldwide norms and a
correction occurred with prices rising by 3 times (in US$ terms) during the seven-year period between 2000
and 2007. Many new ‘property millionaires’ were created during this period, particularly in Cape Town.
HNWI allocation
SA HNWIs decreased their real estate allocation during the review period from 33% in 2007 to 30% in 2017.
Note: “real estate allocation” includes all local and foreign property held by the HNWIs, including their primary
residence.
The South Africa Wealth Report
© New World Wealth. Page 35
6.3 Cash and bonds
Money market
The benchmark interest rate is set by the South African Reserve Bank. The rate stood at 6.75% at the end of
2017, down from 11.0% at the end of 2007.
HNWI allocation
SA HNWIs decreased their cash & bonds allocation during the review period, from 18% of total assets in 2007
to 15% in 2017.
6.4 Equities
Market
South Africa's main securities market is the Johannesburg Stock Exchange (JSE), which is the 17th largest
exchange in the world with a market cap of approximately US$1.1 trillion at the end of 2017.
In US$ terms, the valuations of the JSE all share index were up 17% in US$ terms during the review period
(2007 – 2017). The past year (2017) was a particularly good year with the index rising by 30% in US$ terms.
Global equities also performed well, with the MSCI World Index rising by 43% in US$ terms during the review
period.
Notable local equities that performed well over the 10 year review period included: Naspers, Aspen, Discovery
and PSG. Stocks that performed poorly included: Anglo American, Amplats and Steinhoff.
HNWI allocation
During the review period, local HNWIs substantially increased the share of their assets allocated to equities
from 23% in 2007 to 28% in 2017.
The South Africa Wealth Report
© New World Wealth. Page 36
6.5 Business interests
In order to determine the business interests of HNWIs in South Africa, we have valued the shareholdings held
by individual South African HNWIs in our database. We have also considered forward-looking price-to-
earnings ratios from respective companies on the JSE in order to estimate projected earnings growth.
The value of business interests increased from 20% of HNWI assets in 2007 to 21% in 2017. This rise shows
that entrepreneurship in the country may be rising. Note: entrepreneurs and business owners tend to have
higher business interests than those who have made their money through a salaried position.
Note: “Business Interests” refer to local holdings in businesses that HNWI is or was actively involved in
(example: Bill Gates shares in Microsoft).
6.6 Analysis of Foreign Investments
There was a movement of funds offshore during the review period. At the end of 2017, South African HNWIs
held 17% of their wealth offshore compared to 13% in 2007.
This % is expected to rise to 22% by 2027. This rise will be fueled by increased allocations to foreign property,
foreign cash and foreign equities.
The South Africa Wealth Report
© New World Wealth. Page 37
7 The Wealth Management Sector in South Africa
7.1 Wealth managers & private banks
South Africa is the largest wealth management center in Africa and one of the 20 largest worldwide, with local
assets under management (“AuM”) of approximately US$82 billion at the end of 2017. Major locally based
players are listed in the table below, ranked by locally sourced AuM. As reflected, Investec is the largest wealth
manager in the country, followed by RMB.
Table 20: South Africa: The largest wealth managers by local AuM, 2017
Rank
Wealth manager
Base
1
Investec
SA / UK
2
RMB
SA
3
PSG
SA
4
Nedbank
SA
5
Sanlam
SA
6
Standard Bank
SA
7
ABSA
SA
8
Old Mutual
SA / UK
9
Momentum Group
SA
10
Citadel
SA
Note: Ranked by 2017 year end AuM.
Source: Annual Reports, Investor presentations
Typically, wealth management companies in SA target individuals with over US$400,000 (R10 million) in
investable assets. They also target young professionals who are starting their careers (specifically lawyers
and charted accountants). Services that are most in demand include: asset management services, financial
planning and inheritance planning.
The South Africa Wealth Report
© New World Wealth. Page 38
There are also a number of major foreign based wealth management companies with offices in South Africa.
See list below.
Table 21: South Africa: Major foreign wealth management companies operating in SA, 2017
Company (alphabetical)
Global Base
Credit Suisse
Swiss
Credo Group
UK
Stenham
UK
Stonehage Fleming
UK
UBS
Swiss
Source: New World Wealth
7.2 Family offices
Family offices are a fast growing wealth management segment in South Africa and throughout the world.
They traditionally provide a more customized offering than wealth managers and private banks. Services they
offer include: managing household staff, property management, philanthropy coordination, managing family
education, intergenerational transfer and legal and tax services, on top of the usual investment services.
Typically family offices are exclusively for family members and family related trusts, foundations, charities
and venture capital companies.
Single-family offices (SFO)
Single-family offices generally take the form of a private company that manages the investments of ultra-
wealthy individuals (normally with net assets of more than US$100 million) and their extended family.
Typically, an SFO has a small team consisting of a lawyer, an investment specialist and an accountant.
Multi-family offices (MFO)
There are a significant number of families with between US$30 million and US$100 million in assets that do
not have the economies of scale to establish stand-alone family offices. MFOs cater to these families and
allow them to share administrative costs. Stonehage Fleming is a notable MFO with a presence in SA.
The South Africa Wealth Report
© New World Wealth. Page 39
7.3 Best ways of contacting HNWIs
The best way of contacting HNWIs in South Africa is via their brokers. Therefore, one needs to build strong
relationships with individual brokers in order to get exposure. Strong relationships with fund managers is also
important as many funds deal directly with HNWIs.
Some of the more popular brokerage houses and fund managers for HNWIs in SA are listed below.
Brokers:
Alexander Forbes
Investec
Old Mutual
Liberty Life
PSG
Equity funds:
Allan Gray / Orbis
Coronation
Prudential
PSG
Foord
Family offices, foundations and venture capital companies:
Another good way of contacting HNWIs is via their family offices, foundations and venture capital companies.
In South Africa, around US$24 billion is tied up with venture capital companies and foundations that are
linked to the wealthy. Normally only individuals with net assets of over US$10 million (R120 million) are
wealthy enough to have their own foundations and/or venture capital companies.
The South Africa Wealth Report
© New World Wealth. Page 40
8 Prime property index
What is the best way to determine the exclusivity of an area?
Option1: Price per square meter stats. Internationally considered to be the best way. However, this measure
has some limitations, especially when it comes to valuating houses. This is due to the garden element (i.e.
how do you value the garden?). The truth is price per square meter stats only work really well on apartments
and some areas don’t have many apartments which makes this tricky.
Option2: The number of R20 million homes in area. Allows one to see how many mansions are in an area.
However, this measure can be deceiving as areas that are mainly large houses (such as Sandhurst,
Plettenberg Bay and Bishopscourt) tend to outperform areas that are mainly apartments (such as Umhlanga)
as very few apartments are large enough to cost over R20 million.
We therefore look at both measures in this section.
The South Africa Wealth Report
© New World Wealth. Page 41
8.1 SA square meter prices for suburbs and streets
On a quarterly and annual basis we review the most expensive streets and suburbs for prime property in SA.
Table 22: South Africa: Most expensive streets and suburbs, price per square meter, 2017
Rand per square meter
US$ per square meter
Top 10 most expensive streets in South Africa:
The Ridge & Cliff Road, Clifton, Cape Town
95 000
7 700
Victoria Road, Clifton and Bantry Bay, Cape Town
92 000
7 500
V&A Marina, Dock Road, City Bowl, Cape Town
90 000
7 300
Nettelton Road, Clifton, Cape Town
87 000
7 100
Clifton Road, Clifton, Cape Town
85 000
6 900
Kloof Road, Clifton and Bantry Bay, Cape Town
84 000
6 800
Ave St Leon, Bantry Bay, Cape Town
80 000
6 500
De Wet Road, Bantry Bay, Cape Town
78 000
6 300
Ave Marina, Bantry Bay, Cape Town
76 000
6 200
Ocean View Drive, Bantry Bay, Cape Town
75 000
6 100
Most expensive streets (outside of Cape Town):
Beachyhead Road, Plettenberg Bay
43 000
3 500
Lagoon Drive, Umhlanga
36 000
2 900
Top 10 most expensive suburbs in SA:
Clifton
82 000
6 700
Bantry Bay
76 000
6 200
Fresnaye
61 000
5 000
Camps Bay
56 000
4 600
Bakoven
56 000
4 600
Llandudno
54 000
4 400
Granger Bay
54 000
4 400
Mouille Point
52 000
4 200
Greenpoint
48 000
3 900
City Bowl*
47 000
3 800
Note: Refers to the average price of a prime 200-400 square meter apartment/villa on street or in suburb. Figures rounded
to nearest 100. Figures for Dec 2017. Translated at R12.30/US$.
*City Bowl includes Higgovale, Oranjezicht, Tamboerskloof and V&A Marina.
Source: New World Wealth
The South Africa Wealth Report
© New World Wealth. Page 42
8.2 Top hotspots for R20 million homes in SA
The number of R20m homes in a town or suburb can also be a good indication of its exclusivity. There are
approximately 2,400 South African homes valued at R20 million or more (as of December 2017). 950 of them
are in Cape Town, whilst 580 are located in Johannesburg.
Table 23: South Africa: Most exclusive suburbs in Cape Town (R20m homes), 2017
Suburb
Number of R20m homes, 2017
Camps Bay & Bakoven
200
Clifton
110
Constantia & Tokai
100
Bishopscourt
90
Bantry Bay
80
Fresnaye
80
Llandudno
40
Somerset West
40
Note: rounded to nearest 10.
Source: New World Wealth
Table 24: South Africa: Most exclusive suburbs in Johannesburg (R20m homes), 2017
Suburb
Number of R20m homes, 2017
Sandhurst
110
Hyde Park
100
Houghton
100
Bryanston
80
Westcliff
50
Note: rounded to nearest 10.
Source: New World Wealth
As reflected, the “Big 5 Atlantic Seaboard suburbs of Cape Town” (Camps Bay, Clifton, Bantry Bay, Fresnaye
and Llandudno) account for most of Cape Town’s R20 million homes.
The South Africa Wealth Report
© New World Wealth. Page 43
Table 25: South Africa: Most exclusive towns in South Africa (R20m homes), 2017
Town
Number of R20m homes, 2017
Plettenberg Bay
130
Umhlanga & La Lucia
110
Knysna
100
Stellenbosch
90
Ballito*
80
Paarl
70
Franschhoek
60
George (incl. Fancourt)
50
Wilderness
20
Hermanus
20
Note: rounded to nearest 10. Includes houses, apartments and private wine farms.
*includes Ballito, Salt Rock, Shaka’s Rock and Sheffield Beach.
Source: New World Wealth
Plettenberg Bay
Plettenberg Bay (otherwise known as “Plett”) is a small town on the Garden Route. After Johannesburg and
Cape Town, it is the top location in SA for R20 million homes. Notably, Beachyhead Drive in Plett is considered
to be the most expensive road in SA for residential property (outside of Cape Town).
Umhlanga
Umhlanga has been the top second home hotspot for wealthy Joburgers since the 1970s. Following the
construction of Gateway shopping center in 2001, Umhlanga has also become a major business hub for
wealthy residents to live and work. The apartments on Lagoon Drive in Umhlanga are some of the most
expensive in the country.
Stellenbosch, Paarl and Franschhoek
These three areas are located next to one another. They combine to form the fastest growing area in SA for
HNWIs. There are many private wine farms in the area owned by HNWIs that are worth well over R20 million.
There are also several exclusive residential estates in the area including: De Zalze, Domaine des Anges
Estate and Val de Vie. Val de Vie (which includes Pearl Valley golf course) has been the top rated residential
estate in South Africa for the past three years.
The South Africa Wealth Report
© New World Wealth. Page 44
Knysna
Knysna on the Garden Route is one of the top retirement destinations for wealthy South Africans. It is also
home to several notable luxury residential estates including: Pezula, Simola and Thesen Islands.
Ballito
Ballito is the “Luxury Residential Estate Capital of South Africa” - it is home to Zimbali, Simbithi, Brettenwood
and Dunkirk Estate. There are also a number of exclusive estates under construction in the area. The Ballito
Junction Shopping Center, which opened recently, is expected to make Ballito even more appealing to HNWIs
going forward. For our purposes, Ballito includes Salt Rock, Shaka’s Rock and Sheffield Beach.
George
George is the largest town on the Garden Route and one of the top retirement destinations for wealthy South
Africans. It is home to one of the top residential estates in the country, namely Fancourt.
Wilderness
Wilderness is another small town on the Garden Route. It is located around 5km east of George. It is home
to some of the most spectacular beachfront houses in the country.
Hermanus
Located on the Whale Coast, Hermanus is the main second home hotspot for wealthy Capetonians. It is also
a popular retirement hotspot for wealthy people from Johannesburg and Pretoria.
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8.3 The next hotspots for R20 million homes in SA
The following ‘up-and-coming’ towns and suburbs are expected to be the next hotspots for R20 million homes
in SA:
Keurbooms
Keurbooms is a small village on the Garden Route. The town offers residents more privacy than nearby
Plettenberg Bay.
Natures Valley
Natures Valley is also on the Garden Route. It is located about 30 minutes east of Plettenberg Bay. The forest
and lagoon in the area is relatively untouched which appeals to nature lovers. Notably, no motor boats are
allowed on the lagoon (it is a hotspot for canoeing).
Zinkwazi
Zinkwazi, sometimes pronounced Nkwazi, is a small beach town on the north coast of KwaZulu-Natal. It has
benefited from the construction of King Shaka International Airport in nearby La Mercy. It is less developed
and has larger plots than nearby Ballito and Umhlanga.
St Francis Bay
St Francis Bay is a small beach town on the Sunshine Coast, located roughly 100m west of Port Elizabeth.
Property along the St Francis Canals is very exclusive, as is property in the St Francis Links Golf Estate.
Noordhoek
Noordhoek is part of Cape Town. It has been one of the fastest growing areas in SA (in terms of sq meter
price growth over the past 10 years). Prices there should continue to rise strongly going forward.
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8.4 Luxury residential estates
South Africa is home to over 100 luxury residential estates. We estimate that 38% of South African HNWIs
either live or have second homes on these estates. Reasons for their popularity include:
Safety & security - access gate, private security personnel.
Activities – gym, swimming pool, golf, horse riding, tennis.
Lifestyle and community - parks, gathering places, children playgrounds, schools.
Limited and controlled traffic - safer for children.
Recent trends in this space (over the past year):
There has been a rise in demand for retirement estates (example: Waterfall Hills Mature Lifestyle
Estate). Wildlife estates are also on the rise (example: Mjejane). Overall, there is a move away from
traditional golf estates.
Most developers are now creating small neighborhoods within the estates, as opposed to the old
model where houses were spaced evenly around the entire property. The new model allows for more
parkland and open spaces between the neighborhoods.
A large number of residential lifestyle & golf estates have started to add luxury apartments onto their
offerings. Previously, most residential estates had focused only on houses.
Parkland estates with nice parks, birdlife, walks and trails are becoming more popular (example:
Steyn City).
Notably, South Africa is one of the global pioneers in residential estate living. In fact, the only country with
more residential estates than South Africa is USA (mainly in Florida area). Interestingly, residential estates
are now becoming increasingly popular across the globe, especially in the likes of the UAE, Portugal, Spain,
Mexico, New Zealand, Mauritius and the UK.
Some of the first estates built in SA include: Fancourt, Erinvale and Dainfern – all built in the early 1990s.
Residential estates can be tricky to define. The easiest ones to define are golf estates. For our purposes,
residential estates include: wildlife estates, golf estates, equestrian estates, parkland estates and retirement
estates (i.e. themed estates).
Note: See our annual estate ratings for more information on residential estates in SA.
The South Africa Wealth Report
© New World Wealth. Page 47
9 Appendix
9.1 Regulatory Environment in South Africa
The South African Reserve Bank (SARB) regulates all banking institutions in the country and is
responsible for foreign exchange regulations.
The Financial Services Board (FSB) is the national regulatory body for all non-banking financial services.
The South African Revenue Services (SARS) is a statutory body responsible for tax laws and for
collecting revenue on behalf of the state.
9.2 Regulations on taxes
Notable characteristics of the South African tax system include:
A progressive income tax structure with rates ranging from 18% at the lower end to 45% at the top end.
All income earned by individuals at home and abroad is subject to South African tax.
Regulations on income tax
South African tax rates vary from 18% to 45%. Those who earn over R1.5 million per year are subject to a
45% tax rate. This applies to around 100,000 South Africans according to SARS. The top rate is particularly
high for an emerging market – the emerging market average is around 30%.
People that earn less than R78,000 per annum are except from income tax in SA.
Regulations on VAT
The principal source of indirect taxation revenue in South Africa is value added tax (VAT). The standard rate
of VAT is 15% (it was just increased in the Feb 2018 budget from 14% previously). Exports and certain
foodstuffs such as bread are zero-rated.
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Regulations on corporate tax
South Africa’s corporate income tax rate is 28%. Certain companies qualifying as small businesses are taxed
at lower rates (on income of less than R550,000).
Regulations on wealth tax
No wealth tax is applied on individuals in South Africa.
Regulations on Capital Gains Tax (CGT) and Dividends
The capital gains tax (CGT) rate in SA is 18% for individuals, 22.4% for companies and 36% for trusts.
Regulations on estate duty / inheritance tax
The estate of a resident deceased individual is subject to 20% estate duty, after taking into account a
deduction of R3.5 million against the net value of the estate (i.e. any amount over R3.5 million is taxed at
20%). Any amount over R30 million is subject to 25% estate duty (new in Feb 2018 budget).
Regulations on transfer duties on property
For properties with a purchase price of R900,000 or less there is no transfer duty levied. From then on it
works on a sliding scale of 3% to 13%. Notably, for properties valued at R10,000,000 and above, transfer
duty exceeds R933,000.
Note: the above rates refer to the 2019 tax year (March 2018 to Feb 2019).
The South Africa Wealth Report
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9.3 Exchange controls and rules on overseas bank accounts
Exchange controls
Exchange control regulations dictate how much and under what circumstances one can transfer money in
and out of a country. South Africa is one of the few countries that still operates exchange controls. They are
a legacy of the apartheid government which was concerned about individuals moving money out of the
country during the sanctions period. The new ANC government decided to keep them intact when they took
over power in 1994, as these controls allowed them to keep money within the country and prevent the LC
(Rand) from depreciating.
Under current SA rules, a South African over the age of 18 years, can invest up to R10 million in his/her name
outside SA per calendar year. However, a Tax Clearance Certificate must be obtained in order to do this. An
additional R1 million (single discretionary allowance facility) can be transferred abroad each year, without the
requirement to obtain a Tax Clearance Certificate.
In our view, exchange controls have some short term benefits such as currency and inflation control but over
the long term they tend to erode business growth and investment. One of the biggest problems with SA
exchange controls is that incoming transfers are blocked by local banks until approval is given for release of
funds. This deters inward investment and makes it difficult for people to bring money into the country.
Overseas bank accounts
Under current SA rules, South Africans are not permitted to have overseas bank accounts unless they are
disclosed to SARB and SARS. The upcoming information sharing agreements between Swiss, UK and other
banking hubs (which should be functional by the end of 2018) are expected to expose a large number of SA
individuals that have bank accounts abroad and have not disclosed them - these individuals will be required
to pay heavy fines and back taxes on interest/profit received.
The South Africa Wealth Report
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10 About the Sponsor / Author
AfrAsia Bank - Sponsor
Headquartered in the Mauritius International Financial Centre with Representative Offices in South Africa,
AfrAsia Bank Limited specialises in four core divisions:
Corporate and Investment Banking
Global Business Banking
Private Banking and Wealth Management
Treasury & Markets
New World Wealth - Author
New World Wealth is a global market research group, based in Johannesburg, South Africa. We specialize
in ratings, surveys, country reports and wealth statistics.
Services on offer include:
Ratings and surveys.
Country, city and regional wealth statistics.
Residential property surveys.
Wealth migration studies.
Management consulting.
Custom research.
Our wealth statistics leverage off our in-house HNWI database, which comprises dossiers on over 150,000
HNWIs from around the world.
We provide comprehensive wealth statistics on 90 countries and 125 cities worldwide.
