The Victorian Government has secured the passage of the Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026, introducing a suite of reforms aimed at improving consumer protection and confidence in the apartment market.

Resilience Insurance, Australia’s leading Latent Defects Insurance (LDI) provider, has welcomed the move.

The LDI elements of the Bill passed with bipartisan support and now moves to the Legislative Council where debate and passage are expected later this month. It represents a significant milestone in the national shift toward stronger, longer-term protection for apartment buyers.&nbsp;

The reform would deliver practical benefits across the housing system. Apartment owners will have stronger protection if major defects emerge, developers and builders will have a clearer quality framework to work within, and the State will reduce the risk of serious building failures becoming a long-term financial and social burden for households, communities and government.&nbsp;

LDI helps support apartment delivery while providing stronger protection for buyers and encouraging better construction outcomes.&nbsp;

Resilience LDI provides apartment owners with 10 years of insurance-backed cover for major structural defects from completion, with direct claim access to the insurer. This means owners are not required to first pursue developers or builders through costly legal action before accessing protection.&nbsp;

Resilience Insurance has been operating in Australia since 2022 and has already insured hundreds of development projects covering many thousands of apartments across Australia.&nbsp;

At approximately 1.8 per cent of build cost, it is a cost-competitive alternative to the traditional two per cent Strata Bond, bond while delivering significantly broader and longer protection.&nbsp;

“The Victorian Lower House vote shows that reforms like this succeed when they are practical, evidence-based and supported by industry," says Corey Nugent, CEO of Resilience Insurance.

"Victoria is moving quickly on a reform that will make a real difference for apartment buyers, while supporting better building outcomes and greater confidence in apartment delivery.

“This is step one. We look forward to the Bill completing its passage through the Legislative Council and to working with government and industry to implement the framework effectively.”&nbsp;

Fast Facts: What is Resilience LDI?&nbsp;

<ul>
	<li>Resilience Latent Defects Insurance (LDI): Covers major structural defects for 10 years from completion.&nbsp;</li>
	<li>Consumer-first: Direct claim access, no need for lengthy legal action.&nbsp;</li>
	<li>Cost advantage: At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.&nbsp;</li>
	<li>Market leader: Resilience Insurance is the first approved LDI provider in NSW.</li>
</ul>

The Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026 has passed the Victorian Lower House, putting Victoria on track to become the first state to legislate an industry workable LDI framework as a formal alternative to the Strata Building bond. 

Joel Robinson

10-year Latent Defects Insurance for new apartment buyers set to land in Victoria

Just a few months after acquiring a prime Broadbeach site on the corner of First Avenue and Surf Parade, family-run developer <a href="https://www.apartments.com.au/developers/raptis">Raptis</a> has filed fresh plans for a new apartment development.

Raptis is seeking to deliver a <a href="https://www.apartments.com.au/new-apartments/17-19-first-avenue-broadbeach-qld-4217">29-storey tower with 73 apartments</a> on the 818 sqm site. It will be the developer's seventh project in the suburb, as they are approaching completion of The Sterling on George Avenue.

There will be a pool, barbecue and outdoor dining area, residents lounge and dining, sauna and steam room, gym, and a Yoga and Pilates studio.

<img alt="Raptis" data-entity-type="file" data-entity-uuid="b554da3f-7344-49aa-b1c9-44cf459af0d7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%2010.41.45%E2%80%AFAM.png?VersionId=zzjWu1iO1wnuYv4EV4fyOyf5nSXjGYut" />

Raptis Joint Managing Director, Evan Raptis, says they remain&nbsp;committed to developing quality infill sites across the Gold Coast in the lead-up to the 2032 Brisbane Olympics.

"This project continues our long track record of delivery in Broadbeach, and we look forward to bringing another premium development to this thriving precinct."

The announcement follows strong delivery momentum for Raptis, with The Sterling Broadbeach nearing completion and construction well underway on the final stage of the Waterpoint community adjacent to Harbour Town. The developer's continued investment in the Gold Coast reflects confidence in the region's apartment market fundamentals, underpinned by sustained Southeast Queensland population growth.&nbsp;

The outlook for the region is further bolstered by infrastructure investment tied to the Brisbane 2032 Olympic Games, which is expected to drive continued economic and population growth across the SEQ corridor.&nbsp;

Subject to a favourable response from Gold Coast City Council, construction on the new First Avenue tower is targeted to commence before the end of 2026.&nbsp;

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/it-s-all-in-the-family-four-decades-later-raptis-continues-to-shape-the-gold-coast-skyline">It’s all in the family: Four decades later, Raptis continues to shape the Gold Coast skyline</a>

Read more: <a href="https://www.apartments.com.au/news/qld/raptis-secures-prime-surf-parade-site-for-next-broadbeach-apartment-development">Raptis secures prime Surf Parade site for next Broadbeach apartment development</a> 
&nbsp;

Gold Coast developer brings seventh Broadbeach project to market, targeting construction commencement before year end

First look: Raptis lodges plans for new 29-storey Broadbeach tower 

Brisbane development veteran Kevin Seymour's Seymour Group is set to deepen its presence on one of Brisbane's most tightly held riverfront addresses, lodging revised plans for a luxury apartment development on Oxlade, just a few doors down from The Oxlade, which it completed in 2024.

The <a href="https://www.apartments.com.au/new-apartments/70-72-oxlade-drive-new-farm-qld-4005">new project at 70-72 Oxlade Drive</a>, directly north of The Oxlade, will have 27 apartments across a seven-storey building&nbsp;overlooking the Brisbane River and Merthyr Park. It's a revision from a 2021-approved design.

Designed by bureau^proberts, the project has evolved from the previously approved 26-apartment scheme, introducing an additional penthouse level while maintaining a low-density, boutique character. The development will comprise 26 three-bedroom apartments and a single four-bedroom penthouse, supported by two basement levels with 86 car spaces and 34 bicycle spaces.

The architectural response is centred around two distinct building forms separated by a landscaped open-air atrium.&nbsp;"This dual composition captures and embraces Brisbane’s subtropical environment whilst breaking down built form and scale," the submission to the Brisbane City Council noted.

<img alt="First look: Seymour Group returns to Oxlade Drive with revised riverfront apartment plans in New Farm" data-entity-type="file" data-entity-uuid="c12d84d0-bc11-4067-b46f-5bd2d786a34d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/new%20farm%20landscape.png?VersionId=YEPc2k5CAdh6aAPlu4uVpgZadh4MEfRd" />

A defining feature of the design is a deep landscaped void running through the centre of the building, creating what bureau^proberts describes as a "natural ravine" that enhances airflow, daylight penetration and resident amenity. The design report notes that the separation of the two building volumes is intended to maximise natural light, cross-ventilation and outlook while strengthening connections to the surrounding riverfront setting.

Curved balcony edges, integrated planting and extensive landscaping throughout the façade reinforce the subtropical design approach. The building's façade is softened by elevated gardens and planter beds, creating a green edge that complements the established landscape character of Oxlade Drive and neighbouring Merthyr Park.

New Farm has become one of Brisbane's most sought-after suburbs for developers delivering premium downsizer-focused apartments.

GRAYA has been particularly active in the precinct, completing both Chalk and York in recent years, while construction of Moray House, being delivered for Spyre, is now nearing completion. Architect-turned-developer Joe Adsett recently launched <a href="https://www.apartments.com.au/new-apartments/arcilla-new-farm-by-joe-adsett-28-maxwell-street-new-farm-qld-4005">Arcilla on Maxwell Street</a>, an exclusive collection of just nine apartments.

First look: Seymour Group returns to New Farm's Oxlade Drive with riverfront apartment plans

A new residential tower will be the first piece of a broader mixed-use precinct set to reshape a prominent Newcastle West site, with local developer <a href="https://www.apartments.com.au/developers/gwh">GWH</a> bringing its <a href="https://www.apartments.com.au/new-apartments/cambridge-quarter-newcastle-west-12-denison-street-newcastle-west-nsw-2302">Cambridge Quarter</a> vision to market.

The first release, Tempo, will introduce 87 apartments across a 24-storey tower, marking Stage 1 of the residential component of a larger urban regeneration project planned for the western end of Newcastle's city centre, encompassing the former Cambridge Hotel site.

Positioned on Denison Street, Tempo has been designed as the inaugural building within Cambridge Quarter, a precinct that will ultimately combine apartments, retail activation and revitalised public spaces including the revamping of the Cambridge Hotel.

[smartcode_project:default project_id=135876 project_image_fid=368853]

The tower will comprise a mix of one, two and three-bedroom apartments, including layouts with multipurpose rooms, catering to a broad cross-section of owner-occupiers. Apartment sizes range from around 60 sqm to 192 sqm, with a number of residences oriented to capture views across Newcastle Harbour, the city skyline and coastline.

GWH has emphasised liveability in the design, with open-plan layouts extending to generous balconies and terraces. Residents will have a choice of two interior palettes, while specifications include engineered stone benchtops, SMEG appliances, full-height bathroom tiling and secure building access. Premium upgrade packages will also be available.

Multiple rooftop resident retreats will provide communal outdoor space overlooking the harbour and city, offering an elevated amenity layer above the activity of the precinct below.

[smartcode_project:default project_id=135876 project_image_fid=368851]

The broader Cambridge Quarter vision extends beyond the residential tower itself. Ground-level retail activation and landscaped public areas are planned throughout the precinct, creating a walkable neighbourhood environment connected to the surrounding renewal of Newcastle West. The Cambridge Hotel is also earmarked for future redevelopment into a family-friendly hospitality venue integrated with the new precinct.

The project is strategically positioned within walking distance of Newcastle Interchange, providing access to light rail, regional rail services and direct connections to Sydney. Residents will also be close to Honeysuckle, Newcastle Harbour and the city's beaches and coastal walkways.

[smartcode_project:default project_id=135876 project_image_fid=368852]

For GWH, Cambridge Quarter represents one of its most significant Newcastle developments to date. The locally based developer, which has operated in the Hunter region since 1995, describes the project as a new chapter in the ongoing transformation of Newcastle West.

GWH Executive Director Jonathan Craig said the project had been shaped by a focus on creating lasting community connections.

"We take pride in creating places that last. Spaces where people feel connected, comfortable and a genuine sense of belonging," Craig said.

"Cambridge Quarter is something we are truly proud of, a place shaped by local knowledge, built with care and designed to be part of Newcastle's next chapter."

[smartcode_project_cta:default project_id=135876]

GWH unveils first release at landmark Cambridge Quarter precinct in Newcastle West

<a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Projects</a>,&nbsp;Rainbow Bay's busiest developer,&nbsp;has officially lodged plans for the largest development in its booming local portfolio, seeking approval for a further 88 apartments on Boundary Street.

The proposal&nbsp;at <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">209–213 Boundary Street, Coolangatta</a>,&nbsp;marks the next chapter in the developer's transformation of the southern Gold Coast beachside precinct. It will be its fifth in the area, having already delivered Flow, Awaken and Esprit, while construction continues on the 38-apartment Radia. The new project would rise 57 metres above a consolidated 1,518 sqm site, on the same street as Radia and Esprit.

&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, the proposed development comprises 88 two and three-bedroom apartments across a contemporary podium-and-tower form that integrates extensive landscaping from street level through to the rooftop.

The tower would be delivered above a basement and multi-level podium accommodating resident and visitor parking, with the residential component commencing from level three. The design incorporates cascading planting throughout the façade, landscaped podium edges, and deep planting zones along the Boundary Street frontage.

<img alt="First look: S&amp;S Projects lodges plans for 88-apartment wellness tower at Coolangatta's Boundary Street" data-entity-type="file" data-entity-uuid="677e6615-b5c0-4b6c-b4f9-efb14fcde1a6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ss%20da%20pers.png?VersionId=YOnPKQm7IFXv0M5H326djEpxk80500Hi" />

A key feature of the development is its expansive rooftop wellness and recreation precinct. Plans reveal a resort-style pool deck, gymnasium, sauna, steam room, hot and cold plunge pools, rooftop terraces, barbecue areas and landscaped relaxation spaces positioned to capture views across the southern Gold Coast coastline.

The rooftop wellness focus builds on the vision S&amp;S Projects first outlined when it acquired the site for $20.25 million last year.

"We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden," S&amp;S Projects founder and director Paul Gedoun said at the time.

The proposal seeks a 57-metre building height, representing a 50 per cent uplift on the site's mapped 38-metre height limit. Planning documents argue the additional height is consistent with recently approved and emerging towers in the immediate Boundary Street and Rainbow Bay precinct.

Urbis, acting as planning consultant, said the development would provide "88 dwellings, comprising a mix of two and three-bedroom apartments, contributing to housing choice and supply within an established medium to high-rise coastal urban neighbourhood."

The scheme has undergone extensive pre-lodgement consultation with the City of Gold Coast, with the design refined following feedback relating to architectural expression, landscaping, traffic access and podium treatment.

<img alt="S&amp;S" data-entity-type="file" data-entity-uuid="0a2d70fd-62ac-4b83-97c6-b798fc1243dd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%209.16.31%E2%80%AFAM.png?VersionId=yHmghUwKM3IVGpBktQU1mE.0Lpf3WimG" />

The architectural team is led by Brisbane-based Cottee Parker, one of Australia's most active residential design studios, with landscape architecture by Dunn + Moran. The consultant team also includes ADG Engineers, Windtech and Acoustic Works.

S&amp;S Projects has become one of the most influential private developers operating on the southern Gold Coast. Since entering Rainbow Bay in 2022, the company has assembled a portfolio exceeding $1 billion in end value, establishing itself as a key player in the area's evolution into a premium apartment destination. Pezet Matheson will again handle the sales for S&amp;S.

Coolangatta is entering another wave of apartment development, following the delivery of several prominent residential projects in recent years.

John Kearney's Immerse Projects will launch&nbsp;<a href="https://www.apartments.com.au/new-apartments/kaiya-kirra-beach-5-haig-street-coolangatta-qld-4225">Kaiya on Haig Street</a>&nbsp;soon, meanwhile, Palm Beach-based Sherpa Property Group is preparing to bring its debut Coolangatta development, <a href="https://www.apartments.com.au/new-apartments/flourish-viver-87-griffith-street-coolangatta-qld-4225">Flourish Viveré</a>, to market later this year, subject to approvals.

First look: S&S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street

Wealth

<html><body>
New data prepared for Knight Frank The Wealth Report shows that the number of ultra-wealthy people - with net assets of US$50 million or more - rose by 10% in 2017 – taking the global population to 129,730, with a combined worth of US$26.4 trillion.
The data provided by Wealth-X highlights that the ultra-wealthy population grew at a notably more rapid rate in 2017 than in the previous five years, when there was a cumulative 18% increase.
According to Knight Frank’s Michelle Ciesielski, head of residential research, Australia in Australia, the number of ultra-wealthy people rose by 9% in 2017 – taking the population to 1,260, with a combined worth of US$269 billion.
"This is equivalent to 5.2 ultra-wealthy individuals per 100,000 of the Australian population," she said.
“Over the next five years, the number of ultra-wealthy people in Australia is projected to increase by 37% to 1,720.
“This growth in Australia’s ultra-wealthy population can be attributed to several factors.
"Firstly, we’ve seen significant growth in prime property prices.
"Secondly, despite recent instability, the equities market has also seen gains over the past year.
“In addition, Australia is the third most-preferred global destination for the world’s ultra-high-net-worth individuals (UHNWIs) to emigrate, behind the UK and the US, according to Knight Frank’s annual Attitudes Survey, produced for The Wealth Report.
“Australia ranked in the top five destinations of where UHNWIs plan to buy prime property in 2018. Malaysia, Singapore, China, Hong Kong and the Philippines scored high on the Attitudes Survey for those planning to buy Australian prime property in 2018,” said Ms Ciesielski.
Globally, 34% of UHNWIs already hold a second passport and 29% are planning to purchase one, while 21% are considering emigrating permanently.
 Ultra-wealthy individuals (US$50m+) per 100,000 population across Asia Pacific
<table border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="56">
Ranking
</td>
<td nowrap width="106">
Country
</td>
<td nowrap width="87">
Ultra-wealthy individuals (2017)
</td>
<td nowrap width="110">
Country population
(2016)
</td>
<td nowrap width="93">
Ultra-wealthy individuals per 100,000
</td>
</tr>
<tr>
<td width="56">
2
</td>
<td nowrap width="106">
Hong Kong, China
</td>
<td nowrap width="87">
5,140
</td>
<td nowrap width="110">
             7,346,700
</td>
<td nowrap width="93">
69.96
</td>
</tr>
<tr>
<td width="56">
4
</td>
<td nowrap width="106">
Singapore
</td>
<td nowrap width="87">
1,400
</td>
<td nowrap width="110">
             5,607,283
</td>
<td nowrap width="93">
24.97
</td>
</tr>
<tr>
<td width="56">
11
</td>
<td nowrap width="106">
Taiwan
</td>
<td nowrap width="87">
2,010
</td>
<td nowrap width="110">
           23,626,456
</td>
<td nowrap width="93">
8.51
</td>
</tr>
<tr>
<td width="56">
12
</td>
<td nowrap width="106">
New Zealand
</td>
<td nowrap width="87">
390
</td>
<td nowrap width="110">
             4,692,700
</td>
<td nowrap width="93">
8.31
</td>
</tr>
<tr>
<td width="56">
13
</td>
<td nowrap width="106">
Japan
</td>
<td nowrap width="87">
9,960
</td>
<td nowrap width="110">
          126,994,511
</td>
<td nowrap width="93">
7.84
</td>
</tr>
<tr>
<td width="56">
18
</td>
<td nowrap width="106">
Australia
</td>
<td nowrap width="87">
1,260
</td>
<td nowrap width="110">
           24,127,159
</td>
<td nowrap width="93">
5.22
</td>
</tr>
<tr>
<td width="56">
20
</td>
<td nowrap width="106">
South Korea
</td>
<td nowrap width="87">
2,610
</td>
<td nowrap width="110">
           51,245,707
</td>
<td nowrap width="93">
5.09
</td>
</tr>
<tr>
<td width="56">
31
</td>
<td nowrap width="106">
Thailand
</td>
<td nowrap width="87">
770
</td>
<td nowrap width="110">
           68,863,514
</td>
<td nowrap width="93">
1.12
</td>
</tr>
<tr>
<td width="56">
32
</td>
<td nowrap width="106">
Malaysia
</td>
<td nowrap width="87">
310
</td>
<td nowrap width="110">
           31,187,265
</td>
<td nowrap width="93">
0.99
</td>
</tr>
<tr>
<td width="56">
38
</td>
<td nowrap width="106">
China, Mainland
</td>
<td nowrap width="87">
8,800
</td>
<td nowrap width="110">
       1,378,665,000
</td>
<td nowrap width="93">
0.64
</td>
</tr>
</tbody></table>
Source: Wealth-X, World Bank, Worldometers, Knight Frank Research
</body></html>

j.ballantyne1990-6AQqhLzZaK

Ultra-wealthy population set to grow by 37% in next five years

<html><body>
<div>2017 saw another large increase in global wealth, increasing by 6.4 per cent or (USD) $16.7 trillion to $280 trillion, driven by equity prices and non-financial assets, including housing.  </div>
<div> </div>
<div>Global wealth is projected by Credit Suisse to hit $341 trillion by 2022, driven largely by rapid growth in countries such as China and India. </div>
<div> </div>
<div>The US continued an unbroken run of gains since the financial crisis in 2017. </div>
<div> </div>
<div>The Eurozone saw the creation of 620,000 new US dollar millionaires as the currency picked up, and Australia once again punched above its weight in adding a further 202,000 millionaires, taking the total up from 958,000 to 1.16 million. </div>
<div> </div>
<div>Switzerland's wealth per adult has increased by by a thunderous 130 per cent since the turn of the century in US dollar terms to $537,600, albeit largely due to shifts in the exchange rate, according to the Credit Suisse 2017 Global Wealth Report. </div>
<div> </div>
<div>Among the countries in the world with available figures over the long term, Switzerland stands alone in seeing no decline in wealth inequality over the past century. </div>
<div> </div>
<div>Home to just 0.01 per cent of the global population, Switzerland alone accounts for some 1.7 per cent of the top 1 per cent of global wealth holders, with several thousand ultra-high net worth individuals with personal wealth in excess of $50 million. </div>
<div> </div>
<div>Lucky country</div>
<div> </div>
<div>Switzerland is something of an exceptional case as a tax haven, but next in line comes Australia with a mean wealth per adult of $402,600, partly driven by "high property prices in the capital cities", somewhat perversely.</div>
<div> </div>
<div>Australian household wealth gains have averaged 12 per cent per annum since the turn of the century, and the average debt to assets ratio is surprisingly low at only 20 per cent. </div>
<div> </div>
<div>68 per cent of Australian adults have a net worth of above $100,000, which is some eight times the world average. </div>
<div> </div>
<div>Meanwhile, New Zealand's wealth per adult moved ahead of Norway into fourth place in 2017. </div>
 
<div class="separator"><img src="https://3.bp.blogspot.com/-oAbxOVJ3duU/WhAVKmtzpKI/AAAAAAAAnE4/mChi9Lws_5IQxWjWNSvVkAruPutHLyuhwCLcBGAs/s640/Australia.jpg" width="640" height="394" data-original-height="829" data-original-width="1340"></div>
<div> </div>
<div>Wealth inequality is relatively low in Australia, with a far smaller share of the population having a net worth of under $10,000 than the United Kingdom or US. </div>
<div> </div>
<div>Indeed, when measured in median terms Australia's wealth per adult of $195,417 is not too far off the highest in the world, with only Switzerland edging us out at $229,059. </div>
<div> </div>
<div>There are now 36 million high-net worth individuals in the world with a net worth of $10 to $50 million.  </div>
<div> </div>
<div>Some 2 million of them are located in China - nearly 40 times as many as at the turn of the century - with a further 6.3 million in India and other Asia-Pacific countries.  </div>
<div> </div>
<div>Perhaps not unrelated to this, Australia is projected to be home to 1.7 US dollar millionaires by 2022, up from 1.16 million today.</div>
</body></html>

pwargent-M4siyDbqQY

Batting well as 68 per cent of Australian adults have a net worth of above $100,000

<html><body>
<h1>Three charts on: the great Australian wealth gap</h1>
Young Australians still remain locked out of the housing market as the wealth disparity grows across generations. <a href="https://theconversation.com/profiles/trent-wiltshire-316914"> </a>
It’s a tale of two Australias: older Australians are getting much wealthier, and the young are being left behind.
It’s a story only too familiar to Australians under 45 who have struggled to save enough money to access the housing market in Australian cities. They are a generation for whom the great Australian dream of home ownership has become largely elusive.
<a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6523.0Main+Features12015-16?OpenDocument" target="_blank">Data</a> from the Australian Bureau of Statistics (ABS) shows that older Australians are capturing an increasing share of the nation’s wealth, and the house-price boom is a major cause of the growing divide between the generations.
As you can see in the following chart, households headed by 65-74-year-olds were on average A$480,000 wealthier in 2015-16 than households in the same age group 12 years ago. And that’s after taking inflation into account and despite the damage caused by the global financial crisis. Households headed by 45-54-year-olds are A$400,000 richer.
In contrast, households headed by 35-44-year-olds are on average only A$120,000 wealthier – and for 25-34-year-olds the figure is just A$40,000.
<iframe style="border: none;" src="https://datawrapper.dwcdn.net/A0XEq/3/" frameborder="0" width="100%" height="400"></iframe>
<h2>Property is a key factor for wealth disparity</h2>
Soaring property prices are a major factor behind the rapidly growing wealth of older Australians. According to the <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6416.0Main+Features1Jun%202017?OpenDocument">ABS</a>, house prices grew by 37% on average across all the capital cities between 2003-04 and 2015-16 (and by more than 50% in Melbourne alone). The boom was not limited to the capitals; prices also grew strongly in <a href="https://www.corelogic.com.au/reports/CL_Housing-Affordability-Dec_2016.pdf">regional areas</a>.
The next chart shows that for households headed by someone aged 75 or over, greater property wealth contributed about three-quarters of the increase in their total net wealth. For households headed by 65-74-year-olds and 55-64-year-olds, property contributed about half of the total increase in wealth.
But for younger Australians, again it is a different story.
Bigger mortgages largely offset the increase in property wealth for households headed by 25-34-year-olds and 35-44-year-olds. Baby Boomers have also used the superannuation system to build their wealth. They took advantage of the <a href="https://grattan.edu.au/wp-content/uploads/2015/11/832-Super-tax-targeting.pdf" target="_blank">generous super tax breaks</a> on offer for people nearing retirement, such as the ability to put large, concessionally taxed sums into their super funds just before retirement.
Average superannuation wealth over the same 12-year period increased by A$230,000 in real terms for households headed by 65-74-year-olds, and by more than A$150,000 for households headed by 55-64-year-olds. Strong <a href="https://au.investing.com/indices/s-p-asx-200-net-total-return-historical-data" target="_blank">share market returns</a> have further boosted superannuation balances and other financial wealth.
<iframe style="border: none;" src="https://datawrapper.dwcdn.net/OX09s/6/" frameborder="0" width="100%" height="400"></iframe>
<h2>Young people locked out</h2>
As property prices have boomed, more young Australians have been locked out of home ownership.
As this last chart shows, home ownership rates among households headed by 25-34-year-olds fell between 1981 and 2016, from more than 60% to 45%. For households headed by 35-44-year-olds the fall was from 75% to around 62%. Home ownership rates are also falling for households headed by 45-54-year-olds.
Some of these falls are also partly the result of social changes: Australians are waiting until later in life before starting work, forming long-term partnerships, and having children. But most Australians still want to own a home, so it is reasonable to conclude that higher property prices are the <a href="https://www.rba.gov.au/publications/rdp/2017/2017-05" target="_blank">biggest cause</a> of lower ownership rates.
Two-thirds of 25-34-year-olds responding to a 2017 <a href="https://politicsir.cass.anu.edu.au/sites/politicsir.anu.edu.au/files/ANUpoll-24-Housing-2017.pdf" target="_blank">Australian National University survey</a> thought owning a home was an important “part of the Australian way of life”, and more than half were “very concerned” that younger generations won’t be able to afford a house.
<iframe style="border: none;" src="https://datawrapper.dwcdn.net/lOpWw/6/" frameborder="0" width="100%" height="400"></iframe>
<h2>The bank of mum and dad</h2>
The wealth divide between generations can easily lead to a more profound divide within generations. For many younger people, the only way that they can afford to buy a house is with help from “the bank of mum and dad”.
As house prices have increased, <a href="https://www.rba.gov.au/speeches/2017/sp-ag-2017-02-16" target="_blank">more first home buyers are receiving assistance</a> from family and friends to enter the property market. The strong growth in the wealth of today’s older generations, combined with the steady shrinking of the family size from 1960 to 2000, will lead to more and larger inheritances.
Inheritances tend to transmit wealth to children who are <a href="https://grattan.edu.au/report/the-wealth-of-generations/" target="_blank">already well-off</a>, and home ownership is more likely among those who receive an inheritance, and more likely still among those who receive larger inheritances.
<img src="https://counter.theconversation.com/content/84515/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">Australia is becoming wealthier, but much of the increase is concentrated in the hands of older generations. The trend is unmistakable: unless something changes, the young will fall further behind and inequality will get worse.
<a href="https://theconversation.com/profiles/trent-wiltshire-316914" target="_blank">Trent Wiltshire</a>, Associate, <a href="https://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a> and <a href="https://theconversation.com/profiles/danielle-wood-147710" target="_blank">Danielle Wood</a>, Fellow, Australian Perspectives, <a href="https://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a>
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/three-charts-on-the-great-australian-wealth-gap-84515" target="_blank">original article</a>.
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The great Australian wealth gap

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The movement of private wealth across the world is critical in driving the performance of asset markets and, in particular, property, according to Knight Frank’s latest Wealth Report.
Some movements in wealth take the form of temporary investments while others, like migration, are more permanent.
And as these shifts grow in both frequency and magnitude, so too do their impacts and the extent of the reaction to them.
As with most global trends these days, if you want to understand the scale of wealth flows there is no better place to start than China, where a heady mix of stellar wealth creation and political and economic volatility has led to rising capital movement.
Capital outflows from China have been a constant since early 2014, prompted by a slowdown in the domestic economy, instability in local asset markets, a desire for diversification and the need for a hedge against depreciation as China sells dollars to support the yuan.
Property remains a substantial target for this outbound capital.
This is borne out by the findings of The Wealth Report Attitudes Survey, which confirm that 32% of UHNWIs will invest in offshore real estate in the next two years.
Chinese investment in US residential property, for example, has risen from barely US$300m in 2006 to over US$30bn in 2015, and now accounts for nearly one in every five foreign purchases.
As money moves at a faster rate, so government efforts to control its movement also gain momentum.
Once again, by way of illustration we need look no further than China where wealthy investors – officially limited to US$50,000 a year in offshore transfers – have become adept at maximising opportunities for converting money into other currencies.
The Chinese government reacted in 2016 by regulating access to casinos in Macau, a classic route for moving money, and limiting credit for card- holders travelling abroad.
In 2017 the authorities went further by tightening the rules regarding acceptable investments for offshore transfers – with property explicitly excluded.
Further restrictions seem likely, either formally via policy announcements, or informally through administrative processing.
But China is not unique in its efforts to restrict movement. Examples abound.
Foreign companies with direct property holdings in Russia are now obliged to file details with the authorities.
Since the start of 2016, Brazil has required the identification of natural persons who are the ultimate beneficial owners of newly registered entities.
And, as The Wealth Report went to press, the UK government was consulting on similar moves for foreign companies, mirroring rules introduced in 2016 for UK registered companies.
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.07.39%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.07.39%20pm.jpg" alt="">
This growth in regulatory activity based on understanding where private wealth sits globally will surge further in 2017, ahead of the introduction of the OECD’s Common Reporting Standard (CRS).
The CRS is set to have a critical impact on wealth migration, heralding as it does the sharing of unprecedented amounts of financial data on foreign citizens between governments.
As we explore overleaf, this new reality is raising some searching questions on data and personal security and even potential investment and residency patterns.
Even money already held in offshore centres is not immune from greater oversight.
These are significant wealth pools: at the end of 2016, the store of private wealth held in offshore financial centres totalled around US$10 trillion.
Although only 1% and 6% of private wealth from the US and UK respectively is held in these centres, for the Middle East and Latin America the total is closer to 25%.
While the rate of growth in wealth held in centres such as Hong Kong and Singapore has averaged 10% annually in recent years, a rash of tax amnesties in preparation for CRS is persuading some investors to repatriate funds.
The Indonesian tax authorities’ amnesty on undeclared tax liabilities arising from foreign assets ran from July 2016 until March 2017, and is predicted to result in an outflow from Singapore in particular.
The Greek government has put forward plans for a tax amnesty covering funds held in Switzerland which would tax, legitimise and potentially lead to the repatriation of hitherto undeclared funds.
The Greek proposal comes in the wake of a similar amnesty announced by Italy in 2015, and is intended to discourage the flow of funds from Switzerland to other offshore jurisdictions ahead of the introduction of the CRS.
The past 12 months have also seen a rash of new rules that aim to control the destination of investment flows.
Three Australian states – Victoria, New South Wales and Queensland – have introduced an additional stamp duty surcharge for foreign buyers of residential property, in addition to the new 10% withholding tax on sales by foreign residents of high-value Australian property.
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.07.46%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.07.46%20pm.jpg" alt="">
Elsewhere, we see a new capital gains tax for short-term property investments in New Zealand, the additional rate of stamp duty on high-value property purchases in the UK, and a new empty homes tax in Vancouver.
Clearly, the expansion of so-called “cooling measures” designed to control international wealth flows into property shows no sign of easing.
As The Wealth Report confirmed in 2016, migration of wealth can also take more enduring forms, with 16% of UHNWIs considering a permanent move overseas.
The latest data from Henley &amp; Partners indicates that the world’s wealthy spend over US$2.4bn each year acquiring new nationalities.
Demand is highest from China, Russia and the Middle East, with around four-fifths of US EB-5 visas going to Chinese nationals.
The cost varies considerably, from a few hundred thousand dollars in some Caribbean islands to US$1m and more for citizenship in Cyprus and other European locations.
In the context of continued rising demand for overseas property, the fact that such schemes offer property as an investment route is a powerful draw.
Even here though, pressure from regulators is for rule change to reduce or even prohibit demand for property altogether (see reforms in the UK and Singapore by way of example).
Inevitably, this will have a dampening effect on demand for these particular schemes.
The overriding impression left by any analysis of global wealth flows is one of flux.
Nevertheless, there are two constants: first, ever growing demand from the wealthy to move their money into safe havens; and second, the corresponding determination of governments to exercise control over that process.
Evidence to date suggests that while wealth flows can successfully be corralled and redirected, they will not be curbed.
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Movement of wealth becoming crucial in the property market: Knight Frank

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Personal wealth and the suburb you live in have little influence on the 'health' of your credit score, according to the latest Veda Australian Credit Scorecard.
Data sourced by getcreditscore.com.au, which analysed over two million VedaScores across 326 regions, with the New South Wales suburbs Blue Mountains and the Hawkesbury a higher average VedaScore than those in Potts Point, Elizabeth Bay and Rushcutters Bay.
In Victoria the rural area of Barwon West outperformed Carlton and South Yarra.
Luke Keller, chief executive officer, getcreditcsore.com.au said the research underlines Australia’s next generation could take a lesson or two from their older counterparts on how to successfully manage their finances and maintain a strong credit score.
"It also showed that with some of Australia’s wealthiest suburbs on the lower end of the ratings, this wealth may not be all that it seems,” he said.
"In regional Queensland, for example, the results reveal the Gen Y men of Caboolture Hinterland, who have the lowest VedaScore in Australia, could take some financial tips from their elders, with those aged 65+ in the same region holding one of the highest VedaScores in the country.
"In New South Wales, the rural areas of Blue Mountains (VedaScore: 791) and Hawkesbury (788) with their beautiful, relaxed lifestyles have a higher average VedaScore than those living the high-life in Sydney Inner City’s (738) harbourside suburbs of Potts Point, Elizabeth Bay and Rushcutters Bay.
"The surfing culture of the Central Coast also seems to help cultivate some strong credit scores in Newcastle (765) and Gosford (772), which are surprisingly higher than those living with harbour views in Sydney’s centre.
"While there are many things that go into a score, you can control how you manage it – it doesn't matter if you’re in the Darling Downs or Darlinghurst,” 
Results from the research include:
● McGraths Hill in the outer suburbs of NSW has a high average credit score (787) with a low median property price of $682,000 compared to Darlinghurst, which has a low average credit score (738) and a high median house price of $1.78 million
● Lilydale in Victoria’s Yarra Ranges tells a similar story. The suburb, which has a high average credit rating (789) and a median house price of $624,000, has a stronger credit score than South Yarra in Melbourne City (739) which has a high median property price of $1.46 million
● Queensland’s high $1.62 million median property price its average credit score of 737 is below that of Bald Hills, which has an average credit score of 777 and a median property price of $419,000
● In Western Australia the family oriented, middle class suburb of Melville (797) manage their finances better than those in Perth City (766), which includes the leafy suburbs of Crawley, West Perth and Subiaco
● The winemakers of South Australia’s Adelaide Hills (795) also show North Adelaide (Adelaide City - 735) residents who’s the boss when it comes to credit
● Young women are more creditworthy across the country than young men with Gen X and Gen Y females out performing Gen X and Gen Y males with higher average credit scores in the majority of 326 regions. (304 Gen Y, 289 Gen X) (see below)
Battle of the sexes – Who’s more creditworthy in your generation?
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="142">
Generation
</td>
<td valign="top" width="142">
Female
</td>
<td valign="top" width="142">
Male
</td>
</tr>
<tr>
<td valign="top" width="142">
Gen Y (18-34)
</td>
<td valign="top" width="142">
304
</td>
<td valign="top" width="142">
22
</td>
</tr>
<tr>
<td valign="top" width="142">
Gen X (35-44)
</td>
<td valign="top" width="142">
289
</td>
<td valign="top" width="142">
37
</td>
</tr>
<tr>
<td valign="top" width="142">
Baby Boomers (45-64)
</td>
<td valign="top" width="142">
251
</td>
<td valign="top" width="142">
75
</td>
</tr>
<tr>
<td valign="top" width="142">
Builders (65+)
</td>
<td valign="top" width="142">
156
</td>
<td valign="top" width="142">
170
</td>
</tr>
<tr>
<td valign="top" width="142">
 
</td>
<td colspan="2" valign="top" width="284">
Number of regions
</td>
</tr>
</tbody></table>
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Wealth and status doesn’t equal a good credit rating

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The ASICs Money Watch website has wished you much prosperity and good fortune for Chinese New Year.
Here are some things you can do this year to build your wealth. Try one or two to start with, and see what a difference it can make for you. Remember that small steps now can lead to a better financial future.
<h3>Track your spending</h3>
The road to building wealth starts with knowing where your money is going. You might think you know how much you spend on groceries or takeaway meals each month, but getting a better idea of your outgoings will give you the power to make some real changes in your spending habits.
Use our <a href="https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/mobile-apps/trackmyspend" target="_blank" title="TrackMySPEND">TrackMySpend app</a> to record your everyday expenses, so you have a clear picture of what you are spending your money on, and where you can make some changes.
<h3>Set a budget</h3>
Setting up a budget puts you in charge of your money and allows you to have the control to live the life you want. Our article on <a href="https://www.moneysmart.gov.au/managing-your-money/budgeting/how-to-do-a-budget" target="_blank" title="How to do a budget">how to do a budget</a> has some great tips, and our <a href="https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner" target="_blank" title="Budget planner">budget planner</a> can help you get started.
<h3>Find the best deal on your bank accounts and insurance</h3>
Taking charge of your bank accounts can save you a lot of money. Even if you have banked with the same institution for years, you may not be getting the best deal. What interest are you earning on your savings?
Work out how much you are paying in fees and charges on your account, then shop around for a better deal. It's your money, so take control of it.
Our article on <a href="https://www.moneysmart.gov.au/managing-your-money/banking/switching-bank-accounts" target="_blank" title="Switching bank accounts">switching bank accounts</a> shows you what you need to think about when changing your accounts.
Having the right insurance in place is a critical part of protecting your assets but, unless you shop around, you could be paying more than you need to. Before you renew your home or car insurance policy, check out our article on <a href="https://www.moneysmart.gov.au/insurance/renewing-your-insurance" target="_blank" title="Renewing your insurance">renewing your insurance</a> for tips on how to find the best deal.
<h3>Take charge of your home loan</h3>
Mortgage payments can account for a huge slice of the household budget. Whether you already have a home loan or are saving up to buy your first house, take a look at our tools and tips to help you get ahead:
<ul>
<li>
<a href="https://www.moneysmart.gov.au/managing-your-money/saving/saving-for-a-home" target="_blank" title="Saving for a home">Saving for a home</a> - advice on saving for a deposit on your home</li>
<li>
<a href="https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/mortgage-calculator" target="_blank" title="Mortgage calculator">Mortgage calculator</a> - shows you how much you could borrow, what your repayments will be, and how to pay your loan off faster</li>
<li>
<a href="https://www.moneysmart.gov.au/borrowing-and-credit/home-loans/choosing-a-home-loan" target="_blank" title="Choosing a home loan">Choosing a home loan</a> - how to choose the right home loan for your needs</li>
<li>
<a href="https://www.moneysmart.gov.au/borrowing-and-credit/home-loans/switching-home-loans" target="_blank" title="Switching home loans">Switching home loans</a> - what to consider before you switch home loans</li>
</ul>
<h3>Start or expand your investments</h3>
Investing can be a good way to grow your money. There are many different investment options available, so it's important to choose the right one to suit your needs. We have lots of information to help you better understand and choose the best investment strategy to reach your financial goals:
<ul>
<li>
<a href="https://www.moneysmart.gov.au/investing/invest-smarter" target="_blank" title="Invest smarter">Invest smarter</a> - we explain how to invest and grow your portfolio</li>
<li>
<a href="https://www.moneysmart.gov.au/investing/invest-smarter/risk-and-return" target="_blank" title="Risk &amp; return">Risk and return</a> - learn about investment risks and how to manage them</li>
<li>
<a href="https://www.moneysmart.gov.au/investing/invest-smarter/develop-an-investing-plan" target="_blank" title="Develop an investing plan">Develop an investing plan</a> - find out how an investing plan can help you achieve your short, medium and long-term goals</li>
<li>
<a href="https://www.moneysmart.gov.au/investing/invest-smarter/choose-your-investments" target="_blank" title="Choose your investments">Choose your investments</a> - learn how to choose the right investments for your needs</li>
</ul>
Take our <a href="https://www.moneysmart.gov.au/investing/invest-smarter/investing-challenge" target="_blank" title="Investing challenge">investing challenge</a> to test your knowledge of risk and return, diversification and investment products.
<h3>Pay your future self</h3>
It is never too early to start planning for retirement. Whether you are just starting your career, or beginning to think about life after work, our <a href="https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/superannuation-calculator" target="_blank" title="Superannuation calculator">superannuation calculator</a> can show you how much super you're likely to have when you retire.
A great way to boost your retirement income is to make extra contributions to your super now. Even just a few extra dollars a week can make a big difference in the years to come.
Our tools and tips can help you take control of your money and build wealth and prosperity.
<h3>Clear your debts</h3>
Picture a financial future free from debt stress. If you are struggling to pay off your credit cards or repay loans, we have some advice on how you can bring different kinds of debts under control:
<ul>
<li>
<a href="https://www.moneysmart.gov.au/managing-your-money/managing-debts/problems-paying-your-mortgage" target="_blank" title="Problems paying your mortgage">Mortgages</a> - help with home loans</li>
<li>
<a href="https://www.moneysmart.gov.au/borrowing-and-credit/credit-cards/how-to-pay-off-multiple-credit-cards" target="_blank" title="How to pay off multiple credit cards">Credit cards</a> - dealing with multiple credit cards</li>
<li>
<a href="https://www.moneysmart.gov.au/managing-your-money/managing-debts/trouble-with-debt/problems-paying-your-fines" target="_blank" title="Problems paying your fines">Fines</a> - help for people struggling with fines</li>
<li>
<a href="https://www.moneysmart.gov.au/managing-your-money/managing-debts/trouble-with-debt/problems-paying-your-utility-bills" target="_blank" title="Problems paying your utility bills">Utility bills</a> - take action on water, electricity, phone and gas bills</li>
<li>
<a href="https://www.moneysmart.gov.au/life-events-and-you/under-25s/studying/paying-off-your-uni-debt" target="_blank" title="Paying off your uni debt">University debt</a> - when you have to pay your uni debt and how to make voluntary payments</li>
<li>
<a href="https://www.moneysmart.gov.au/managing-your-money/managing-debts/how-to-get-out-of-travel-debt" target="_blank" title="How to get out of travel debt">Travel debt</a> - pay off your travel expenses</li>
</ul>
For more information, <a href="https://www.moneysmart.gov.au/tools-and-resources/news/building-wealth?utm_medium=email&amp;utm_campaign=MoneySmart%20tips%20-%20February%202016&amp;utm_content=MoneySmart%20tips%20-%20February%202016+CID_098e159a8e233fb37f2131eb2500ed97&amp;utm_source=CampaignMonitor&amp;utm_term=money%20tips%20in%20Chinese" target="_blank">click here</a>.
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po-LsXgBTHBmX

Property 101: Building wealth in the Year of the Monkey

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China’s slower growth figures have caused jitters in world financial markets. Nevertheless its growth remains at miracle levels. At this pace, China would appear to remain on track to become the richest and most powerful country in the world, bar none.
In a scenario where Chinese “miracle” growth continues around 5-6% for three decades and gradually slows to the average world growth rate, the average Chinese citizen would be as wealthy as the average American.
But ongoing Chinese growth miracle seems an unlikely outcome, when compared to the history of emerging economies. Instead, it is likely China will have to grapple with what is called the “middle income trap”. This is because China’s income level is currently at a level where many countries seem to stagnate.
<h2>The middle income trap</h2>
An example of this can be seen in the figure which charts per capita income for China, Turkey and Brazil as a percentage of the United States. It shows that, despite its remarkable growth, China’s income gap with the US has only reached the level that Brazil and Turkey had already achieved by the 1970s.
<a href="/images/2016/01/29/image-20160127-26778-1nykof.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/01/29/image-20160127-26778-1nykof.jpg" alt="">
Moreover it can be seen that, since the 1970s, Brazil and Turkey made practically no further ground in closing the gap with the US.
According to a 2012 World Bank report, this slow growth pattern is typical of middle income countries. Specifically, of 101 countries that were “middle income” in 1960, only 13 broke through the middle income band to become rich countries.
Thus, based on history there is a reasonable concern that China’s growth will slow to an extent that it stops catching up with the West. China would then begin to look like like Brazil or Turkey in the sense that per capita income remains well below Western levels and there is a constant threat of political and economic instability.
<h2>Causes of the middle income trap</h2>
Unfortunately we don’t know very much at all about why there appears to be a middle income trap.
The authors of the World Bank study who coined the term suggested it was due to rising wage costs that make exports less competitive.
It is true that wage increases can hurt some export sectors, but market forces prevent this happening for the economy as a whole. Thus wage growth cannot reduce an economy’s overall competitiveness.
Other explanations suggest the middle income trap results from too much investment in physical infrastructure at the expense of education and skills. Alternatively it could be a result of political failure.
But these are only descriptions of the symptoms – they don’t tell why so many countries have political failures or why so many countries over-invest in physical capital.
So while there are many descriptions of the middle income trap, there is no clear theory and hence there are no testable propositions. It remains an elusive statistical fact.
<h2>Traps versus bad luck and bad policy</h2>
The lack of a clear view about the causes of a middle income trap makes it difficult to know whether it is a pattern likely to continue in the future. In a recent study, therefore, we tried to get a better sense of the predictability of a middle income trap from a purely statistical viewpoint.
For example if, for any reason, a country was unable to change its growth rate, the growth rate would exhibit persistence over time. That is, if things got better by chance one year, there would be some market or political force that brings things back to trend.
Alternatively if some countries simply had a run of bad luck, or made some big policy mistakes, there may be little persistence in the data. The growth rate might display some randomness from one year to the next.
We therefore tested to see whether we could reject the hypothesis that the path of per capita income had followed a random trend for 47 middle income countries.
Thus in the previous figure one can see that there is apparently very little difference in the trend path of Brazil and Turkey – they have similar growth rates and growth variance. But, in fact, the statistical tests show that Turkey’s growth rate has persistence, but Brazil’s growth rate is random.
So despite the visual similarity, Brazil and Turkey have very different statistical properties.
We found that only seven countries show evidence of a persistent trend toward staying stuck in the middle like Turkey.
Of the rest of the countries, half had a trend that was random like Brazil. For most countries there was no evidence of a persistent trend toward the middle income band.
So only very few countries’ per capita income time paths are consistent with the pattern that we would expect to see if they were constrained to their current relative income level.
Although these results are descriptive, they could be taken as evidence against a structural reason for a middle income trap. That is, perhaps what appears to be a pattern of behaviour across many countries, is just the way things panned out.
So despite the bleak historical record, maybe good statesmanship, market friendly policies and bit of luck are all that is needed to sustain growth.
For China therefore, as a middle income country, the historical odds are against replicating the Japanese or South Korean economic miracle. Thankfully, however, the past need not be a good predictor of the future.
 
Peter Robertson is professor, University of Western Australia and can be contacted <a href="https://theconversation.com/profiles/peter-robertson-11950" target="_blank">here</a>.
Longfeng Ye is assistant researcher, University of Western Australia and can be contacted <a href="https://theconversation.com/profiles/longfeng-ye-221938" target="_blank">here</a>.
Both are authors for The Conversation.
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