$649 billion in private wealth is held in South Africa according to the South Africa Wealth Report by The AfrAsia Bank. File image: IOL

DURBAN - $649 billion in private wealth is held in South Africa according to the South Africa Wealth Report 2019 by The AfrAsia Bank. 

39200 South Africans have net assets of $1 million or more while 2070 South Africans have net assets of $10 million or more.

According to report the top spend categories for South Africa's wealthy include dining, travel and shopping and recreation. 

Trends between 2008 to 2018

Performance over the past 10 years was moderate with total private wealth held by people living in South Africa rising by 13 percent from $575 billion in 2008 to $649 billion in 2018.

South Africa's performance was positively impacted by the following factors:

1. The JSE all share index, which was up by 42 percent during the 10 year period (in dollar terms).
2. Strong growth in the local professional services sector (law firms,consultancy firms).

South Africa's performance was negatively impacted by:

1. A declining currency - the rand depreciated significantly during this period from R9.30/$ at the end of 2008 to R14.40/$ at the end of 2018.
2. A sluggish local residential property market (prices down by 5 percent in dollar terms over this period).
3. The ongoing migration of wealthy people out of the country.

2018 trends

2018 was a poor year for South Africa. Total private wealth held by people living in the country declined by 10 percent from $722 billion in 2017 to $649 billion in 2018.

This drop was facilitated by a weakening local currency - the dollar exchange rate went from R12.30/$ at the end of 2017 to R14.40/$ at the end of 2018. The JSE all share index was also down significantly during the year (by 29 percent in terms of dollars).

Trends over the next 10 years to 2028

Solid wealth grow this expected over the next 10 years.South Africa's wealth is forecast to grow by 30 percent to reach around $844 billion by 2028.

Going forward, South Africa has strong fundamentals for wealth growth including:

1. A well-developed wealth management, fund management and banking system.
2. A large financial media which helps disseminate reliable information to investors.
3. One of the 20 biggest stock exchanges in the world. Also, the JSE has been one of the fastest growing stock markets worldwide over the past 25 years (in terms of market cap growth).

BUSINESS REPORT ONLINE