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SA's super rich increases, rich declines - report

Johannesburg – The number of so-called ultra-high net worth individuals (UHNWI) - or super rich - in South Africa has increased by 18% since 2007, according to the SA Wealth Review 2016 published by New World Wealth in association with MasterCard.  

The report reveals there are 620 super rich people in South Africa, each holding net assets of $30m (about R427m) or more. The super-rich population held $73bn (about R1 039bn) in wealth at the end of 2015, up by 40% to 2007.

This is in contrast to South Africa’s so-called high net worth individuals (HNWI) - or rich - each holding net assets of $1m (about R14.23m) or more, that declined 10% from approximately 42 800 HNWI in 2007 to 38 500 in 2015.  

Insights and trends from the report emphasise that affluent consumer values are evolving from the material to the experiential, and this drives new and different expectations, according to Mark Elliott, division president at MasterCard, SA.

According to Andrew Amoils, head of research at New World Wealth, the super-rich are usually big business owners, whereas the rich have typically built their wealth through professional careers - for instance as attorneys, chartered accountants or doctors – or they own a family business.

“While many the rich (HNWIs) are choosing to leave SA and have most of their assets tied up in local property and equities, the super-rich are staying in the country, possibly because of their business interests in the country," said Amoils.

In his view, the increase in the number of super rich in SA could be attributed to the fact that they tend to hold more assets offshore, which acts as a currency hedge, and they are often involved in multiple businesses.  

When it comes to the spending habits of South Africa’s wealthy, the report found that collectables are growing in popularity, with classic cars, wine and art topping their investment preferences.

For example, the most expensive car purchased by a South African collector during 2015 was a Ferrari 250 GTO from the 1960s that was purchased for $24m (about R340m). Other popular collectables include top-end men’s watches and rare wild animals such as buffalo, roan- and sable antelope that can fetch over $20m (about R284m) per animal.

A second home is another investment preferred by the wealthy. According to the report, Plettenberg Bay is the most popular location for the super-wealthy to own a holiday residence, closely followed by Umhlanga, La Lucia and Knysna.

Up and coming hotspots are less well-known, but as appealing - for example Zinkwazi, Gretyon, Tulbagh and Keurbooms - and offer more privacy than the traditional coastal holiday destinations.

When the wealthy are not visiting their second homes, their most preferred local holiday destinations include Cape Town, Umhlanga, Ballito, the Cape Winelands and the Kruger National Park. Internationally, Mauritius, the Seychelles, and the Okavango Delta are popular warm-weather destinations, while skiing in Switzerland tops the list for cold-weather recreation.

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