Cape Town is on track to overtake Johannesburg to become South Africa's wealthiest city by 2040 — thanks to coastal semigration.
So says the 2023 Africa Wealth Report, published by Henley & Partners with New World Wealth.
The report is the continent’s annual benchmark for wealth research, providing a comprehensive review of the sector in Africa, including trends among high-net-worth individuals (HNWIs), the luxury market and wealth management.
Andrew Amoils, head of research at New World Wealth, said, “For our purposes ‘wealth’ refers to an individual’s net investable assets, including property, cash and listed-company holdings.”
When it comes to wealth growth, the report ranked South Africa's major cities by the number of resident dollar millionaires.
Four of Africa’s top 10 wealthiest are in South Africa — Johannesburg has the most millionaires in Africa, with 14,600.
Cairo with 7,400, is ahead of Cape Town, which has 7,200. Lagos is fourth with 5,400 millionaires, and Nairobi is fifth with 4,700. Durban has 3,600 HNWIs and Pretoria 2,400.
The report compares relative wealth growth rates over the past 10 years in South African cities and found Johannesburg and Pretoria performed poorly in terms of growth “mainly due to coastal semigration”.
“If the rate of internal relocation continues, Cape Town is on track to overtake Johannesburg to become South Africa’s wealthiest city by 2040.
Millionaire growth in Johannesburg, the report states, decreased by 40% from 2012 to 2022, while Cape Town saw an increase of 10% growth in the same period.
Pretoria experienced a 25% decrease.
With more South Africans choosing to settle in the Western Cape, estate agents have being seeing a dip in the availability of property stock and a boost in entrepreneurial growth.
According to a Sunday Times report, perceived better governance, lifestyle, tertiary institutions and less load-shedding are factors driving residents from Gauteng to move.
Property experts say semigration was disrupted by the pandemic, but since the end of lockdown restrictions has regained momentum, with the Western Cape proving popular.
The report also found that South Africa is home to some of the world’s most upmarket residential areas including Clifton in Cape Town, Beachy Head Drive in Plettenberg Bay, and Sandhurst in Johannesburg.
New World Wealth’s latest figures show there are about 3,700 homes in South Africa valued at more than R18m.
“By this measure, South Africa ranks as one of the 20 largest prime residential markets in the world, well ahead of the other countries in Africa and in line with big emerging markets such as India and Brazil.”
The report predicts “especially strong wealth growth is expected in Western Cape towns like Plettenberg Bay, Keurboomstrand and Hermanus.
“Plettenberg Bay [known as Plett] is a major wealth hotspot on the Garden Route. After Johannesburg and Cape Town, it is the top location in South Africa for ultra-luxury homes, with about 350 homes valued at more than R18m [at December 2022].”
If the rate of internal relocation continues, Cape Town is on track to overtake Johannesburg to become South Africa’s wealthiest city by 2040
— Africa Wealth Report 2023
“Plett has seen a big rise in permanent residents over the past few years, which has boosted its wealth,” said the report.
Keurboomstrand, near Plett, is also expected to see exceptional growth over the coming decade.
“Traditionally seen as the safest and best-run town in South Africa, Hermanus holds great appeal for wealthy individuals and is also a popular retirement destination.”
Affluent parts of Hermanus include Eastcliff, Fernkloof Estate, Kwaaiwater, Onrus and Voëlklip.
The report also delved into total investable wealth held on the African continent which amounts to $2.4-trillion and its millionaire population is expected to rise by 42% over the next 10 years.
The report reveals that Africa’s big five wealth markets — South Africa, Egypt, Nigeria, Kenya and Morocco — account for 56% of the continent’s high-net-worth individuals and more than 90% of its billionaires.
There are 138,000 HNWIs with investable wealth of R18m or more living in Africa, with 328 centimillionaires worth R1bn or more.
“Despite a tough past decade, South Africa is still home to over twice as many HNWIs as any other African country, and an impressive 30% of the continent’s centimillionaires.”
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