High growth of millionaires
Africa tipped to be in the forefront
THE AFRICAN continent was expected to experience the highest growth in ultra high net worth individuals in the next 10 years, according to the latest edition of the Wealth Report.
Ultra high net worth individuals were defined as people with at least $30 million (R372m) in assets.
Ivory Coast was expected to experience the highest growth at 119 percent followed by Nigeria at 90 percent.
Andrew Shirley, the editor of the report, which was launched by real estate company Knight Frank and Standard Bank Wealth and Investment, said yesterday that the number of millionaires globally was expected to increase by 31 percent in the next 10 years, but the number of African millionaires was expected to grow by 53 percent during the same period.
“This is a very powerful message about the potential of the continent,” he said.
Shirley said South Africa already had 72 000 millionaires and was clearly the wealth hub of Africa.
It was therefore not surprising that the growth in millionaires in South Africa at 42 percent over the next 10 years was a bit slower than in other countries on the continent, he said.
The report revealed Africa with 169 000 millionaires had relatively few compared to other major wealth hubs in the world, such as North America with 5.8 million millionaires.
Shirley said there was going to be huge wealth creation in countries in Africa, such as Kenya, Tanzania and Nigeria.
“So it’s these places you want to be looking at for property investment or any deals.
“There is (also) going to be a huge growth in the number of middle class people. They are not the ultra high net worth people, but they are going to be spending an awful lot of money and they are going to be driving wealth creation in Africa and Asia,” he said.
Both Johannesburg and Cape Town were ranked among the top 40 most important cities in the world by the world’s ultra high net worth individuals, according to the report.
Shirley said there was relatively flat growth globally last year in luxury property at only 2 percent. But he said there was a huge diversity of performance around the world, with luxury property prices on the African continent increasing by 6.5 percent, which was “pretty respectable”.
Shirley said Buenos Aires was the worst performing individual city globally in terms of luxury property value growth, while New York had produced “a staggeringly strong performance” with 19 percent growth.
He said there was a very strong performance by luxury property in South Africa last year, with the weak rand making luxury property a very attractive proposition.
Shirley said $1m could only buy 17m 2 of property in Monaco last year but 204m2 in Cape Town.
He said property mattered because 21 percent of the wealth of African high-net worth individuals was accounted for by their primary and secondary residences and 23 percent of them were looking to buy another property this year.
Shirley said people were worried about factors that would impact on their ability to create and sustain wealth.
These included wealth taxes, which was what most ultra high-net worth individuals in Africa were worried about; succession issues and how people were going to pass their wealth down to the next generation; and political interference, because governments were looking more closely at how the wealthy moved their money around the world.
Luxury property prices on the African continent increased by 6.5 percent last year.