New World Wealth and Afrasia Bank have published a Wealth Report 2019 for South Africa, showing which areas are expected to see the next influx of super wealthy buyers.
According to the group’s in-house prime property indices, South Africa’s residential property market has performed poorly between 2008 and 2018, with the average price of property dropping by 5% in US dollar terms.
Contributing to this decline is a depreciating rand (which weakened from R9.30/USD at the end of 2008 to R14.40/USD at the end of 2018), but other factors were also at play, NWW said.
These include rising utility bills, which have more than tripled over the period, high transfer duties, as well as increased difficulty in getting a home loan, which has kept the market subdued.
More recent threats around land redistribution without compensation have also kept potential home buyers at bay, NWW said, while government policies around visa restrictions have also played a role in pushing potential foreign investment away.
Despite these downsides, New World Wealth noted that not all property markets were performing poorly.
Specifically, homes in luxury residential estates – such as Zimbali, Fancourt and Val de Vie – were up (almost 30% in some cases), and luxury apartments across the country were also selling well, and for high prices.
South Africa’s up-and-coming areas for the super rich
While Cape Town and Joburg remain home to the wealthiest individuals in the country, there are a few other regions showing strong growth in the number of wealthy individuals settling there.
This includes the likes of Umhlanga in KZN, which has been the top performing resident market in South Africa over the last 10 years, NWW said.
Umhlanga’s popularity has also led to an uptick in interest in surrounding areas like Ballito, La Lucia and Zinkwazi.
According to NWW, three areas specifically are expected to become the new hotspots for R20 million homes in South Africa:
Nature’s Valley is a small town on the Garden Route, about 30 minutes east of Plettenburg Bay. The nearby forest and lagoon are relatively untouched, with motorboats banned from the area. A number of large homes have already started to go up in the area, while old homes are being renovated.
Zinkwazi (or Nkwazi) is a small beach town on the north coast of KZN. It is benefiting from the buzz in the region around Umhlanga, and is less developed than nearby Ballito – offering larger plots of land.
Keurbooms is a small town on the Garden Route near Plettenburg Bay. It offers more privacy than Plett, making it more appealing for wealthy individuals looking to settle down in a quieter space.
Most exclusive areas
To determine the most exclusive areas in South Africa, New World Wealth looked at two factors – the price per square metre, which is an international standard, and the concentration of R20 million homes in the area.
With some of the highest property prices in the country, the list of the 10 most expensive streets in South Africa on a per-square-metre cost basis are all found in Cape Town, where prices range between R73,000 per square metre, to R90,000 per square metre.
In terms of R20 million homes, these are the areas that have the highest concentration of millionaire properties in the country:
|Cape Town||No. of R20 million homes|
|Camps Bay and Bakoven||180|
|Constantia and Tokai||90|
|Johannesburg||No. of R20 million homes|
|Rest of South Africa||No. of R20 million homes|
|Umhlanga and La Lucia||120|
|Ballito (including Zimbali)||80|
|George (including Fancourt and Oubaai)||50|