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Show me the Money

Jun 21, 2018 | Featured, Luxury Trends

Recently released wealth reports give insight into the lifestyles and spending habits of affluent South Africans

Every year, AfrAsia Bank releases the South Africa Wealth Report, carried out by New World Wealth, to investigate where South Africa stands in the global wealth stakes. The 2018 report revealed South Africa ranks 33rd worldwide in terms of total wealth, and 38th worldwide in terms of the number of high-net worth individuals.

High-net-worth individuals, or HNWIs, are those with wealth exceeding US$1 million (R12 million), and “wealth” in this context means a person’s net assets, including their property, cash, equities and business interests, and minus any liabilities. The total private wealth held in South Africa amounts to about US$722 billion, and about US$306 billion of this is held by HNWIs.

PASSING WEALTH TO THE NEXT GENERATION

According to The Wealth Report 2018 from Knight Frank, HNWIs in Africa have the following approach to leaving a financial legacy:

47% have a robust succession plan in place
43% of wealthy households send their children overseas for education
26% have a full wealth transfer plan in place
19% are planning to permanently emigrate to another country
17% are planning to buy an additional home outside their home country
15% are planning to buy an additional home in their home country

Caption: This six-bedroom home in Fresnaye, Cape Town, is listed by Pam Golding Properties for R75 million.

WHERE DO SA’S DOLLAR MILLIONAIRES LIKE TO LIVE?

The South Africa Wealth Report looks at the exclusivity of residential areas using two metrics. The combination is useful, because the first metric, price per square metre, sometimes falls short in comparing apartments with homes with a garden, and the second – looking at the number of R20 million homes in an area – excludes many areas that have mostly apartments, such as Umhlanga in KwaZulu-Natal.

 

  ZAR/m² US$/m²
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
Green Point 48 000 3 900
City Bowl 47 000 3 800

 

THE TOP TEN MOST EXPENSIVE STREETS IN SA ZAR/m² US$/m²
The Ridge and 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
Nettleton 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
Avenue Saint Leon Bantry Bay, Cape Town 80 000 6 500
De Wet Road Bantry Bay, Cape Town 78 000 6 300
Avenue Marina Bantry Bay, Cape Town 76 000 6 200
Ocean View Drive Bantry Bay, Cape Town 75 000 6 100

Caption: Designed by a leading architect, the Fresnaye house sits on two plots measuring 1 432 m2. It features a vineyard, wine-making facilities and a wine-tasting room.

WHAT ELSE SOUTH AFRICANS DO WITH THEIR WEALTH

According to the South Africa Wealth Report 2018, the top spend categories for wealthy South Africans are shopping and recreation, dining and travel. When looking at what they actually purchase or own, things get a little more interesting. Buying collectibles in South Africa is up significantly over the past decade. This category includes any luxury item that holds its value reasonably well over time, including classic cars, art, fine wine and stamps.

FINE ART

The report states that the top-end art market is valued at about US$65 billion, and African art accounts for about US$1 billion of this, with US$450 million being held in South Africa. “According to our in-house indices, South African fine art prices have risen by 28% over the past 10 years (in US$ terms). Global fine art prices have risen by 12% over the same period,” says Andrew Amoils, head of research at New World Wealth.

LEADING SOUTH AFRICAN ARTISTS (IN TERMS OF PRICE) INCLUDE:

 

  Average price per painting Can fetch up to
Irma Stern
Currently the most valuable South African artist
R5 million R30 million
Maggie Laubser
The price of her paintings is expected to increase steeply in the near future
R600 000 R5 million
JH Pierneef R800 000 R20 million
Alexis Preller R600 000 R10 million
Gerard Sekoto R400 000 R5 million
Hugo Naudé R300 000 R2 million
William Kentridge R800 000 R5 million
John Meyer R300 000 R3 million

 

New World Wealth predicts that the following artists will fetch similar prices to the artists above in the near future:

  • Adriaan Boshoff
  • Stefan Ampenberger
  • Branko Dimitrov
  • Roberto Vaccaro (sculpture)
  • Portchie
  • Isabel le Roux

Caption: Portrait of Rebecca Hourwich Reyher by Irma Stern, currently South Africa’s most valuable artist, is held in a private collection.

TRAVELS OF THE YOUNG AND WEALTHY

At the Africa Luxury & Wealth Summit, held at the Belmond Mount Nelson Hotel in February, ExecuJet general manager of aviation Philip du Preez unpacked some trends about how millennial HNWIs in Africa travel. He said African millennials (aged 21 to 34) are now joining the affluent elite, and their media behaviour confirms they are determined to keep up with upscale lifestyle trends. They use gold or platinum credit cards to shop for well-known brands based on social media and media trends, and make many air trips – for both business and leisure – during which they stay in upmarket hotels and resorts. Social responsibility and environmental concerns are top priorities for the young African wealthy – they take a company’s commitment to corporate and social responsibility into consideration when they make purchasing decisions.

PHILANTHROPIC CONCERNS

According to The Wealth Report 2018 from Knight Frank, Africa’s wealthy are most likely to support the following philanthropic causes:

30% job creation/training
27% environmental issues
25% education
24% health/disease control
21% disaster relief/emergencies
18% social issues (equality/human rights)
18% animal welfare and conservation
6% arts

TEXT Georgina Guedes PHOTOGRAPHS Shutterstock, supplied

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