Global wealth is on the move as high-net-worth individuals (HNWIs) relocate from longstanding wealth strongholds to other countries in increasing numbers, and there are three main factors currently motivating them to do so, as we recently noted in our specialist luxury property analysis for the Henley & Partners Africa Wealth Report.
These three factors are quality of life, new economic opportunities and favourable tax rules – and the first two are especially relevant in Africa, as is clearly evident if one tracks the current wealth flows across the continent and their effects on luxury property demand, development and prices in certain cities and other affluent nodes.
Countries and regions that are attractive to HNWIs benefit from significant injections of capital into their economies, so it is encouraging to see that South Africa country has 3700 more resident millionaires this year than it did in 2024.
However, it is important to note that the majority of these wealthy individuals are not living in the financial heartland of Gauteng as one might expect. Indeed, the Western Cape now has a higher HNWI population than Gauteng, with 17 300 millionaires spread between Cape Town, the Winelands, the Whale Coast and the Garden Route, compared to approximately 14 000 who live in Johannesburg and Pretoria. Notably, the southern region is also home to 65 of South Africa’s 112 centi-millionaires and six of its eight billionaires.
This wealth redistribution from North to South has developed over many years as increasing numbers of affluent families “semigrated” from Gauteng and other regions to the Western Cape in pursuit of a better quality of life derived from better provincial and municipal governance.
The rise of remote working during the Covid-19 pandemic accelerated this trend, which has lately been further underpinned by the growing international recognition of Cape Town, in particular, as one of the best cities in the world to live in and the influx of more and more foreign HNWI families to join their South African counterparts in the ‘Mother City’.
This has given rise to a shortage of luxury homes for sale and soaring prices in high-demand areas like the Atlantic Seaboard and Constantia and led, in turn, to buyers broadening their search to other parts of the province that also offer exceptional lifestyle advantages.
These include the Whale Coast and its central town of Hermanus, where property sales have doubled in the past five years and the average home price has risen by 75%, and the Cape Winelands, where prices in luxury wellness estates like Val de Vie have almost tripled since 2020.”
Other millionaire “hotspots” that have emerged in the Western Cape include George and Plettenberg Bay on the Garden Route along the southern coast. This boasts a string of world-class golf estates and signature courses where overseas buyers are now snapping up magnificent luxury homes with sea and mountain views and easy access to quality schools, private healthcare amenities and upmarket shopping venues - all for a fraction of what it would cost them to enjoy this lifestyle elsewhere in the world.
Meanwhile, the quality of life for residents of Johannesburg and Pretoria continues to be negatively affected by decaying transport, electricity and water networks, poor municipal management and relatively high crime levels, so it is not surprising that prime property prices in Central Sandton are still sitting at around USD1800/sqm, compared to USD5800/sqm in Cape Town’s most sought-after suburbs.
It is important to note, though, that Johannesburg does have several things in its favour, not least the fact that it is still seen and experienced as the financial heart of SA, and is responsible for 33 percent of its GDP, compared to the Westen Cape's 14%. It is thus the biggest provider of employment and business opportunities and consequently still leads, by far, in overall internal migration (semigration) in SA, accounting for 60% of all interprovincial moves, according to the latest Wise Move Report.
Johannesburg also attracts more international migrants overall than Cape Town (mostly from Europe, other parts of Africa and the Far East) and this number is increasing as the business opportunities inherent in the vast African market and the African Continental Free Trade Agreement (AfCFTA) become more apparent.
Read more: What the new US tariff rate means for the SA property market
Johannesburg property is also more affordable, across the board, than Cape Town, and we see many people who moved to the Western Cape post-Covid returning to Gauteng now. This includes quite a high percentage of HNWIs who are no longer allowed or able to work completely remotely for their blue-chip employers based in Johannesburg, and would rather not be weekly commuters.
In fact, the prevailing view of all current incomers or returnees to Johannesburg is that the city has much to offer in terms of location, climate, affordable lifestyle and especially career or business opportunities, while most of the problems it has can and will be fixed, now that there is a commitment at national government level to doing so. Consequently, we expect real estate values in the city to show a steady increase over the next 12 to 18 months, especially in the luxury sector of the market.
