Wealth trends: Economic survival tactics of SA’s super-rich

The current state of doom and gloom in the country has many South Africans worried about their futures.

The rising cost of living coupled with ongoing state-controlled load shedding and failing infrastructure have forced many South Africans to start making notable changes to their livelihoods in order to prepare for the future.

South Africa’s economy is not set to grow by more than 1.5 % this year.  Chief economist Dawie Roodt of the Efficient Group states that South Africa is unlikely to achieve even 1.5 % growth.

“Our economy cannot grow faster than 1.5% if we are lucky. The population is growing at 1.5%. We have unemployment levels of nearly 50%. We have rising levels of poverty in South Africa,” Roodt said in an interview with 702.

TOUGH TIMES FOR GLOBAL ECONOMY

With the world’s economy most likely to be heading into recession in 2023, high-net-worth individuals (HNWI) seek to continue growing and protecting their wealth.

The world’s wealthy have a reputation for adding to their wealth during a crisis, as seen by large jumps in net worth by the likes of Jeff Bezos and Elon Musk during the Covid-19 pandemic.

SNAPPING UP HOMES ABROAD

The country’s mega-rich are setting up home outside of South Africa’s borders.   Second homes are seen as a great way to hedge against inflation.

According to the Africa Wealth Report 2022, published by Henley Global, private wealth held on the continent will rise by 38% over the next decade, with many individuals investing in offshore real estate to diversify their asset portfolios.

The report also says that many of the rich are acquiring residency through investment, which has become an attractive way for individuals to protect their futures, rather than to move away from their country of residence due to political or socio-economic challenges.  

SEMIGRATION TO COASTAL AREAS

Another trend that is being noted is that of semigration. Many of South Africa’s HNWIs are relocating to coastal towns in regions such as the Whale Coast and the West Coast. BusinessTech reports that the Garden Route is another area that is seeing a flood of interest at the moment.

With the ability to work remotely, a number of South Africans are choosing to relocate to places where they can continue their work, albeit away from the country’s cities which no longer offer the high standard of living they previously did.

ALSO READ: Reassessing ‘home’: More South Africans opting for semigration