Although many wealthy South Africans are packing their bags for the UK, new migration data shows that the inverse is also true.
The latest Wealth Migration Report 2023 from Henley & Partners and New World Wealth shows that around 400 High Net-Worth Individuals (HNWIs) those with a net worth of over US$1 million (roughly R18 million) emigrated out of South Africa in 2022 with a further 500 leaving the country in 2023.
The UK is an emigration hotspot for South Africans with the 2021 UK census noting that over 215,000 South Africans live on the island.
However, according to New World Wealth, the United Kingdom is also increasingly seeing an outflux of millionaires to other destinations including South Africa.
“The United Kingdom, and London especially, has traditionally been seen as one of the world’s top destinations for migrating millionaires and for many years (from the early 1900s to 2010), it consistently attracted large numbers of wealthy people from Europe, CIS, Asia, Africa and the Middle East,” New World Wealth said.
“However, this trend began to reverse around a decade ago as more millionaires left the country and (fewer) came in.”
“Notably, during the five-year period from 2017 to 2022, the UK has lost approximately 12,500 more HNWIs than it has gained through migration, and it is expected to lose another 3,200 HNWIs to migration in 2023.”
Reasons for the outflux include poor performance of the London Stock Exchange (LSE) dropping from the largest stock market before World War 1 to 11th globally and Brexit, with many in the financial services moving to other nations in Europe.
The UK health system is also deteriorating, whilst there are increasing safety concerns in major cities.
Capital gains tax and estate duty rates in the UK are also the largest in the world, deterring wealthy retirees from living there.
In addition, the growing power of the USA and Asia in the hi-tech space has led to several wealthy UK tech companies moving their base locations.
Considering these issues, many HNWIs have left the UK for other destinations over the past decade and Cape Town, South Africa, is listed among the top receivers of UK wealth.
New World Wealth said that other top destinations for migrating HNWIs include:
• Paris, France
• Amsterdam, The Netherlands
• Dubai, the UAE
• Sydney, Australia
• New York City, USA
• Frankfurt, Germany
• Silicon Valley, USA
• Toronto, Canada
• Marbella, Spain
• Geneva, Switzerland
• Miami, USA
• Palm Beach, USA
• Tel Aviv, Israel
• The Algarve in Portugal and
• The French Riviera
Cape Town is a popular destination in South Africa for wealthy expats, most notably for its good governance, natural beauty and relatively affordable luxury property market when compared to other international cities.
Ross Levin from Seeff recently noted that there has been an influx of international buyers into Cape Town due to the reasonably flat price at the top end of the property market and the weaker rand.
It’s not only HNWIs that are buying property in Cape Town, with the below R10 million range far more affordable for UK buyers compared to their home country.