Rand strength helps grow SA's wealthy - report

Johannesburg – There is a total of 84 000 South Africans in the top 1% of the world’s wealthy, and the changes in exchange rates have helped influence the changes in household wealth, according to a report.

The eighth edition of the Credit Suisse Global Wealth Report released this week, revealed that throughout 2017 wealth grew at a faster pace than in recent years.

In South Africa, 1.5 million people fall within the top 10% of the world’s wealthy. Only 4% of individuals have wealth above $100 000. There are 58 000 people who are millionaires in US dollar terms.

Household wealth grew strongly before the global financial crisis (GFC), rising from $8 300 to $25 500 by 2007. Following the GFC wealth declined slightly but has recovered, growing at 7.5% per year since 2010.

Credit Suisse explained that fluctuations in asset prices and exchange rates account for much of the changes in household wealth across regions and countries in the short term.

“Depreciation of the rand greatly amplified the wealth decline in 2008,” the report read. In the past two years the rand has rebounded, and wealth per adult has risen in dollar terms, the report explained.

South Africans’ personal wealth is mainly financial assets, which make up 64% of the household portfolio. "This reflects a vigorous stock market and strong life insurance and pension industries," the report read.

Given low real estate prices, average real assets amount to $9 400 twice as much as debt of $4 500.

Total wealth amounts to R800bn.

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