Kenya’s high net worth individuals (HNWIs) reduced property investments in foreign countries by 42 per cent over the past one year in favour of investing in local properties, according to the 2023 Attitudes Survey issued yesterday with Knight Frank’s annual Wealth Report.
The survey also shows that Kenya’s wealthy fared better than the wealthy anywhere else in the world during the economic turmoil of 2022. It shows that local tycoons retreated from international citizenships and foreign property in favour of Kenya and Africa as safe havens.
This came at a time the world’s Ultra-High Net Worth Individuals (UHNWIs) – individuals worth more than $30 million (Sh3.81 billion) – saw their fortunes slashed globally by 10 per cent last year.
Europe’s tycoons were the hardest hit with their net worth falling by 17.3 per cent over the one-year period, while Africa’s UHNWIs saw the lowest losses, recording an overall drop of just 5 per cent. This fall was driven by property price falls owing to the Covid-19 pandemic, soaring energy prices amidst the Ukraine-Russia war, falling stock markets, and surging inflation and interest rates.
The survey shows that wealth managers reported that overseas property holdings of Kenya’s HNWIs – individuals with a net worth of more than $ million (Sh127 million) – has fallen to 11 per cent this year down from 19 per cent last year.
This figure is about a third of the global average (32 per cent) of the wealthy who own property in foreign countries signaling that the rich in Kenya are becoming increasingly positive about the local property market.
This is further buttressed by the finding that Kenya’s wealthy are the most positive in the world and predict their wealth to grow in excess of 10 per cent this year, a global high.
“In this general pivot away from international exposure and towards investment in Kenya and Africa, Kenya’s HNWIs are also the most optimistic in the world, with 50 percent expecting their wealth to increase by more than 10 percent in 2023. This compares with just 21 percent of global HNWIs expecting rises of the same level,” said Mark Dunford, CEO Knight Frank Kenya.
Further, the number of Kenyan HNWIs planning to apply for foreign citizenship fell to 11 per cent compared to 28 per cent last year driven by the stronger investment environment in Africa coupled with key changes in investor visas including the UK’s closure of its Tier 1 investor visa scheme in February 2022.
The survey found that Kenya’s HNWIs have also shifted their options for where they want to purchase their second homes with 60 per cent of these individuals preferring to buy a second home in Kenya.
Some 50 per cent of Kenya’s super rich prefer to buy a second home in the UK, and 40 per cent cited the US while Canada also increased in popularity, with 25 per cent of the HNWIs including it in their top 5 locations.
However, European locations Sweden, Denmark and Monaco disappeared from Kenyan HNWI’s top choices, while Egypt and Tanzania emerged as new entrants.
“Nowhere in the world was immune from last year’s inflationary trends, or geopolitical risks. However, with the wealthy in Kenya and Africa less exposed to overseas property holdings and equity markets than HNWIs globally, their assets proved more resilient to the global disruption,” said Liam Bailey, Global Head of Research the Wealth Report. BY DAILY NATION