A recent study from London based wealth consultancy WealthInsight sought to find out where the major second home destinations in South Africa are located.
Based on the study, the top six luxury second-home locations in South Africa include:
1. Cape Town
2. Knysna
3. Plettenberg Bay
4. Hermanus
5. Stellenbosch
6. Umhlanga
Note: these are ranked by the number of millionaires with second homes in these areas as at the end of 2011.
Within Cape Town, the most prominent areas for millionaire second homes are Clifton, Camps Bay, Bantry Bay, Fresnaye and Llandudno.
Based on WealthInsight figures, over 20 percent of these homes are owned by foreigners.
Where are the foreign buyers coming from?
The following table gives an indication of the origin of foreign buyers of prime South African property in 2007 and 2011 and WealthInsight’s projections for 2016.
As reflected, wealthy UK citizens made up the largest share of the market in 2011, although their share has fallen between 2007 and 2011.
The most interesting trend has been the large rise in the number of buyers from the rest of Africa, which rose from 7 percent of foreign buyers in 2007 to 20 percent in 2011.
These numbers are expected to rise to 35 percent by 2016.
Foreign Real Estate Investment in South Africa, 2007–2016
Origin 2007 2011 2016
UK 35% 18% 15%
Germany 27% 22% 14%
Africa 7% 20% 35%
Other 31% 40% 36%
Total 100% 100% 100%
Source: WealthInsight
Based on the research, there were just over 9 000 foreign millionaires with homes in South Africa at the end of 2011.
WealthInsight defines “millionaires” as individuals with net assets of US$1 million or more excluding their primary residences.
According to WealthInsight, South Africa had just over 44 700 millionaires at the end of 2011.
Johannesburg accounted for 48 percent of these millionaires, Cape Town 19 percent, Durban 6 percent and Pretoria 5 percent.
The number of millionaires in South Africa has since risen to 48 800 in 2012 and this number is expected to reach over 63 000 by 2016.- Andrew Amoils