South African Luxury Property favoured by the Worlds Wealthy
South African Luxury Property Favoured by the World’s Wealthy
The latest Knight Frank Wealth Report Attitudes Survey indicates that the growth potential in wealth in Africa was 89% last year, while the predicted outlook for 2015 is at a figure of 82%. Africa is third on the list of continents, with North America first and Latin America at 85%.
Of those asked whether any of their clients were interested in ski, vineyard or equestrian property, Asian ultra-high-net-worth individuals' (UHNWI) interest in vineyards is high, with 40% from China, 43% from Taiwan and 31% from Malaysia showing interest.
There is also some interest in equestrian property, reflected as 29% from Africa and 40% from the UAE. Another interesting result revealed is that there are no Africans interested in ski property, the interest seeming to come from Europeans (35%) and 50% from the USA.
The survey confirms that control of their property investments is important to the wealthy; almost 80% of respondents said UHNWIs prefer to invest directly into property, with only 12% choosing to use a fund vehicle.
Brick and mortar retains its appeal for the latest generation of UHNWIs, with 45% of respondents saying their younger clients were more interested in property than their parents.
Analysing a report such as the Attitude Survey shows us where people are looking to invest in luxury property, what they’re looking for, and what sort of market the UHNWIs are buying and selling in.
The Ivory Coast has the highest forecast growth (at 119%) in UHNWIs in Africa, with Nigeria a close second at 90%, according to the report.
Deon de Klerk, Head of Wealth and Investment at Standard Bank, says Africa has the highest growth potential in the world at the moment.
He says Africa accounts for 15% of the world’s population, but delivers only 4% of the world’s global output. Yet it offers great opportunities over the medium and long term.
How does this all affect South Africa?
Out of the top 40 cities in the world where UNHWIs choose to invest, Johannesburg is listed as 28th and Cape Town 36th. This survey takes into account what each city has to offer, and why it is in high demand.
The Prime International Residential Index, which takes into account the performance of property as an asset class, lists Cape Town as 8th in the world rankings, with a 13.2% annual growth, and Johannesburg in 19th position, with 8.7% annual change.
These are the only two cities in Africa to feature in the top 100, which is a healthy indication of the luxury property sector in South Africa, says Steward. As a comparison, London is listed in 32nd position, with 5.1% growth, and Buenos Aires as 99th with a -15% change.
In comparing property prices, the survey shows that $1 million will get you 17sqm in Monaco, and 204sqm in Cape Town, which makes this area attractive to foreigners, however, the majority of the market here is still local.
The last interesting factor is what is happening in the commercial sector. Several wine farms have been bought as trophy purchases in the Western Cape by Chinese investors, and that they are also investing heavily in industrial property.
The Wealth Report reinforces what local property data services such as PropStats are indicating, that property prices are growing steadily, and that certain areas in South Africa will continue to be good luxury property investment prospects.
Source :P24