Global Courant 2023-05-25 12:51:57
South Africa is losing extremely wealthy people in a challenging economic environment.
According to Knight Frank’s latest Wealth Report 2023, the number of Very High Net Worth Individuals (UHNWIs) in South Africa will decline in 2022.
A UHNWI is someone with a net worth of $30 million (R575 million) or more, including their primary residence.
In South Africa, the number of UHNWIs fell by 50 people, from 592 in 2021 to 542 in 2022 – a decrease of 8.4%.
However, the decline was not as severe as high net worth individuals (HNWIs) – people with a net worth of $1 million (R19 million) or more.
For HNWIs in South Africa, the total number decreased by 7,479 individuals from 36,228 in 2021 to 28,749 in 2022 – a decrease of 20.8%.
While both categories declined, Knight Frank said the number of HNWIs and UHNWIs is expected to increase by 2027.
For UHNWIs, South Africa is expected to gain 61 new super-rich, with an overall growth of 11.3% to 603 by 2027.
For HNWIs, the picture is less optimistic. The number of HNWIs is expected to grow to 34,006 – an 18.3% increase from 2022 – but this will still be lower than the figure recorded in 2021.
“Despite the ongoing challenges Africa and South Africa face, it is still a place that clearly holds great opportunity for the UHNWI,” said Nick Gaertner, Director and COO of Knight Frank South Africa.
“The past 12 to 18 months have proven to be a significantly challenging economic environment globally, and while it is easy to highlight the flaws in South Africa, it is a country that offers tremendous business and investment opportunities, one of which UHNWI clearly manages to capitalize on. benefit than in most first world and developed countries.”
“With problems comes the opportunity to create solutions and drive rapid business growth, something UHNWI is likely to benefit from.”
Millionaire type 2021 Movement 2022 Movement (proj.) 2027 HNWI 36,228
-20.8%
28,749
18.3%
34.006 UHNWI 592
-8.4%
542
11.3%
603
Global achievements
Globally, the total number of UHNWIs fell by 3.8%, after a record increase of 9.3% last year.
“Last year’s decline in the total number of UHNWIs worldwide was largely due to underperforming equity and bond markets. On the other hand, 100 prime residential markets worldwide saw average price growth of 5.2% and luxury assets 16%, helping to stabilize the decline. The dip is just that,” said Liam Bailey, global head of research at Knight Frank.
“Looking at the longer term, the global UHNW population grew by 44% in the five years to 2022 and while we forecast growth to slow to 28.5% over the next five years, the recent short-term dip will costly as we adapt to a new economic environment.”
The Middle East was the best performing region with a 16.9% growth in the number of UHNWIs in 2022. The UAE was the fastest growing country, with an increase of 18.1%.
While the number of UHNWIs declined in South Africa, the rest of Africa performed robustly, with growth of 6.3%.
Australasia and America experienced minimal growth of 0.7% and 0.2% respectively
Despite Malaysia, Indonesia and Singapore expanding their UHNWI populations, the total population in Asia fell by 6.5%.
Europe was the hardest hit area, where the total number of UHNWIs decreased by 8.5%. However, the tax havens of Ireland and Monaco grew by 3.9% and 0.9% respectively.
While the total UHNWI population declined in 2022, the number of HNWIs increased by 2.9% to nearly 70 million worldwide.
However, the number of billionaires fell by 5% to 2,629 worldwide.
Read: ‘New’ type of emigration hits South Africa – and young professionals are behind the drive
