The rise in wealth bodes well for prime residential property
Recent reports of current annual growth of 31% in the ranks of the wealthy in South Africa (compared with 19% in 2010)* is good news for prime residential property.
Firstly, it will create a welcome new layer of buyers of luxury homes. Secondly, the sustainability of the top end of the market will be reinforced as more and more of the new wealthy buy into it. Thirdly, it will compensate for the (hopefully temporary) withdrawal of foreign investors who, in spite of the attractions of the weaker rand, seem to be adopting a wait-and-see strategy based on recent negative socio-economic and political developments in South Africa.
Meanwhile, in the recently published global Wealth Report 2012, Renato Grandmont, chief investment officer for Citi Wealth Management and Citi Private Bank in Latin America, picks Joburg as one of the world cities of the future (along with Cairo, Lagos, Mumbai and other well-established centres, such as London, New York and Moscow). This comes as no surprise.
Sandton now the most favoured base for foreign corporates
With its world-class infrastructure, Joburg remains the port of entry for foreign business visitors to Africa - and particularly the fast-growing southern African region. As a result, upmarket Sandton is now by far the most favoured base for foreign corporates intent on establishing operating footholds in the region. This has hugely favourable implications for Joburg's luxury residential property market.
Ennik Estates is the exclusive affiliate in Gauteng of Christie's International Real Estate, the USD100 billion sales a year global luxury property arm of the world's largest and oldest fine art auction house.
*Source - RMB Private Bank
About the author
Ronald Ennik is CEO of Ennik Estates.