South African cities have nabbed the top three places on a list of 15 prime property hotspots in Africa for 2019.
The 2019 Africa Wealth Report by AfrAsia Bank and New World Wealth compared the US dollar price of a 200m² to 400m² apartment in the most exclusive part of major African cities or towns as of December 2018.
Cape Town landed the number one spot, followed by Umhlanga (north of Durban) and Sandton in Johannesburg at number three.
Expect to cough up US$5 600 (about R82 600) per square metre in Cape Town's exclusive Atlantic Seaboard suburbs of Clifton and Bantry Bay).
Along Umhlanga's Lagoon Drive you would need about $2 800/ m² for a luxury a apartment. At about R41 300/ m² this is roughly half of what you would pay for the same type of apartment in Clifton or Bantry Bay.
When looking at buying something similar in central Sandton, you would likely have to pay $2 600 (about R38 350). For the purposes of the report, "wealth" refers to the net assets of a person. It, therefore, includes all their assets - like property, cash, equities and business interests - less any liabilities.
The report estimates that an average individual living in Africa has net assets of approximately US$1 900 (about R28 025) in terms of wealth per capita. This is, therefore, less than what one would pay for one square metre of a luxury apartment described above.
Popular property types for the super rich in Africa were found to include luxury apartments, beachfront villas and homes in residential estates.
The report found that residential property normally constitutes between 25% and 30% of the net assets of an average high net worth individual (HNWI) living in Africa. The report defines a HNWI someone with wealth of US$1m (about R14.74m) or more.
Andrew Amoils, a wealth analyst at New World Wealth, told Fin24 on Monday that possible reasons for high prices in Cape Town could be that the high-end market was driven by strong overseas buying in the 1990s and early 2000s.
Cape Town is home to Africa's most exclusive and expensive suburbs such as Clifton, Bishopscourt, Camps Bay and Bantry Bay. The Mother City is also a hotspot for wealthy second homeowners from around the world, explains Amoils.
As for Umhlanga, Amoils said it has been the top second home hotspot for wealthy Joburgers since the 1970s.
"Following the construction of Gateway shopping centre in 2001, Umhlanga has also become a major business hub for wealthy residents to live and work. The apartments on Lagoon Drive in Umhlanga are some of the most expensive in the country," he explains.
As for Sandton, Amoils said most of Johannesburg's wealth is concentrated in Sandton, which is home to the JSE (the largest stock market in Africa) and to the head offices of most of Africa's largest banks and corporates.
The report estimates that there are approximately 140 000 dollar millionaires living in Africa, each with net assets of US$1m or more. There are 23 dollar billionaires living in Africa, each with net assets of US$1bn or more.
Top 15 most expensive property hotspots in Africa:
- Cape Town (Clifton, Bantry Bay): $5 600/m²;
- Umhlanga north of Durban (especially Lagoon Drive): $2 800/m²;
- Sandton in Johannesburg (especially central Sandton): $2 600/m²;
- Nairobi: $1 800/m²;
- Marrakesh in Morocco: $1 700/m²;
- Tangier in Morocco: $1 700/m²;
- Casablanca in Morocco: $1 500/m²;
- Luanda in Angola: $1 300/m²;
- Accra in Ghana: $1 200/m²;
- Lagos in Nigeria: $1 100/m²;
- Abidjan in Ivory Coast: $1 000/m²;
- Alexandria in Egypt: $1 000/m²;
- Maputo in Mozambique: $900/m²;
- Cairo in Egypt: $900/m²;
- Kampala in Uganda: $800/m²