South Africa’s super rich hide more money offshore every year
Being very rich did always, among other things, mean buying the best houses available. Although this still holds true and real estate remained the most significant asset class for high net-worth individuals in South Africa, they have decreased their real estate investments over the past ten years from 33 % to only 30. They were also more likely to move their funds out of the country.
As property investment in South Africa is on a decline, more money is being moved out of the country. At the end of last year, South Africa’s High Net Worth Individuals held 17% of their wealth offshore compared to 13% in 2007. According to the South Africa 2018 Wealth Report released by AfrAsia Bank and New World Wealth last week, this percentage is expected to rise to 22% by 2027. This rise will be fuelled by the will to buy property outside of their homeland troubled by poor security and complicated politics.
The Wealth report defines rich people as those individuals with the wealth of $1m (about 12 million Rand) or more. “Wealth” is defined as net assets of a person. It includes all their assets, that means property, cash, equities and business interests minus any liabilities.
“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. Notably, South Africa has over twice as many millionaires (HNWIs) as any other African country,” writes the report.