Australia and the United Arab Emirates (UAE) are set to a major influx in the number of wealthy South African migrants.
According to the Wealth Migration Report for 2023, done by Henley and Partners and New World Wealth, South Africa lost over 1,500 high-net-worth-individuals (HNWIs) – people with a net worth above USD1 million (roughly R18 million) in 2022.
The report said that 400 of these HNWIs emigrated in 2022, with a further 500 expected to leave the country in 2023.
“Millionaire migration figures can be a telling real-time barometer for the health of an economy as wealthy people are extremely mobile and they, therefore, tend to be the first to move,” the group said
One area that is incredibly popular with South African migrants is Australia. According to the Australian Bureau of Statistics’ 2021 cultural diversity census, nearly 190,000 South African-born people live in country.
According to Andrew Amoils, Head of Research at New World Wealth, Australia is set to see the largest inflow of HNWIs in 2023, with the nation expected to add 5,200 new arrivals in 2023.
Amoils said that the inflows are possibly linked to Australia’s points-based immigration system favouring wealthy individuals and those with professional qualifications, such as accountants, doctors, engineers, hi-tech professionals, and lawyers.
He added that the country attracts millionaires mainly from Asia and Africa but also from high-income countries such as the UK.
Amoils said that Australia’s popularity among migrating millionaires is due to the following reasons:
- Weather, beaches, and scenery — the country is rich in natural beauty.
- Wide open spaces — Australia has one of lowest population densities in the world, with only three people per km2. This compares very favorably to the worldwide average of 60 people per km2 (see latest World Bank data).
- Safety and security — New World Wealth’s in-house safety index currently rates Australia as one of the safest countries on earth, along with the likes of Iceland, Switzerland, Malta, and New Zealand.
- First-class healthcare system — Australia’s public healthcare system is rated among the best in the world. It is also relatively simple for incoming high-net-worths to pay their way onto the system, unlike the USA, where obtaining healthcare insurance can be complicated and expensive, especially for aging individuals.
- Advanced economy — Australia is especially strong in energy and mining, financial services, healthcare, and real estate.
- High quality of life for families — the country holds great appeal as an ideal place for bringing up children
- Excellent education opportunities — Australia’s education system frequently ranks among the top in the world.
- English-speaking country — Most HNWIs globally know English, whether as their first or as an additional language.
- Taxes — although company and income tax rates are quite high, unlike most other high-income markets, Australia has no estate duty, which encourages wealthy people to stay in the country and build their businesses for future generations.
Amoils added that roughly 4,500 HNWIs are expected in the UAE in 2023, with large numbers coming from the UK, Russia, Lebanon, Pakistan, Turkey, Egypt, Nigeria, Hong Kong, China and South Africa.
A net inflow of approximately 4,500 millionaires is expected in the UAE in 2023 — one of the highest on record. In pre-pandemic years, the UAE traditionally saw net inflows of around 1,000 HNWIs per year.
According to Amoils, reasons millionaires are drawn to the UAE include the following:
- Safe haven status — the UAE is considered a safe haven in the volatile Middle East and Africa region.
- Highly diversified economy — the Emirates is strong in many key sectors, including financial services, healthcare, oil and gas, real estate, technology, and travel and tourism.
- Low tax rates — along with Bermuda and Monaco, the UAE has the most competitive tax rates in the world.
- First-class healthcare system — the UAE has a top-class healthcare system, and many foreigners opt to be treated there.
- Luxury hub — the Emirates offers top-class shopping and restaurants.
- Prime real estate — top-end apartments and luxurious villas are available throughout the country.
- Good international schools — there are over 200 international schools in the Emirates.
- All-year-round leisure activities — the UAE offers a wide choice of beaches, water parks, and yachting marinas
The United Kingdom is incredibly popular for emigrants from South Africa, but it has recently seen a net outflow of HNWIS.
According to the UK’s Office for Statistics’s International Migration, England and Wales: Census 2021, over 215,000 South Africans live in the UK.
However, from 2017 to 2022, the UK lost roughly 12,500 more HNWIS than it gained through migration, with it expected to lose another 3,200 millionaires to migration in 2023.
The UK was traditionally seen as main destination for wealth for people from Africa, Asia, Europe, and the Middle East.
Reasons for the exodus include:
- Non-domiciled residents — large numbers of wealthy non-doms are leaving the country.
- Brexit impact — numerous wealthy businesspeople have rebased to Europe over the past five years, possibly due to Brexit. Most of those moving to the European Union work in the financial and professional services sector (namely, wealthy financiers, hedge fund managers, investment bankers, lawyers, and wealth managers).
- Healthcare — the healthcare system in the UK is deteriorating.
- Increasing safety concerns — especially in the big cities.
- Taxation — capital gains tax and estate duty rates in the UK are among the highest in the world, which deters wealthy people from living there, especially retired HNWIs
- Shrinking importance of the London Stock Exchange on the global stage — there has been slow growth in the London Stock Exchange over the past decade in terms of both new listings and overall US-dollar price growth. Several major companies have also delisted from the exchange recently.
However, despite the decrease in overall millionaires, several areas in the country have gained wealth due to an increase in centi-millionaires – those with a net worth above USD 100 million in investable wealth. These include:
- Virginia Water
The Cotswolds is also growing in popularity, with the area becoming a second home hotspot for London’s centi-millionaires.