Developer <a href="https://www.apartments.com.au/developers/bottega-property-group">Bottega House</a> has secured council approval for its first Brisbane project - a $270 million luxury residential development on an absolute riverfront site in leafy St Lucia.&nbsp;

The 15-storey project, known as <a href="https://www.apartments.com.au/new-apartments/st-lucia-by-bottega-house-180-macquarie-street-st-lucia-qld-4067">St Lucia by Bottega House</a> , will occupy a prime north-facing site at 178-180 Macquarie Street, directly fronting the Brisbane River in the established inner-west suburb known for its rowing clubs, golf courses and sprawling University of Queensland campus.&nbsp;

St Lucia by Bottega House will feature a suite of amenities including dedicated wellness spaces, a mineral pool and cold plunge. The project has been positioned to attract affluent owner-occupiers seeking high-quality, house-sized apartments.&nbsp;

Bottega House has been set up by co-directors Nick Malloch, Louis Mennes and Craig Marsh.

Malloch said the project drew inspiration from its Brisbane River setting and leafy inner-west surrounds, while responding to the demands of discerning locals looking to transition from freestanding homes into apartment living.&nbsp;

"With an expansive river frontage and lush green surrounds, we knew we had to create something special that reflects the natural beauty of the location while offering residents masterfully crafted homes," said Malloch.&nbsp;

"Our intent was to complement the project's quiet, private setting by introducing residences that offer a calm retreat and sanctuary from the everyday. The result is a harmonious blend of architecture, interiors and amenity that emphasises wellbeing, comfort and beauty without excess."&nbsp;

Malloch added that project consultants had been carefully selected in alignment with Bottega House's commitment to care, quality and attention to detail. The design team includes architects <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a>, interiors practice <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and landscaping by <a href="https://www.apartments.com.au/architects/urbis">Urbis</a>.&nbsp;

Three-bedroom apartments are expected to start around $5 millio. Selling agents Keenan &amp; Byrne said the pricing strategy for the project was anticipated to achieve upwards of $25,500 per square metre.&nbsp;

The project's development approval this week follows the success of Bottega House's inaugural Queensland project - a 22-storey collection of full-floor sky homes at Broadbeach on the Gold Coast which included the sale of a two-storey penthouse at a record price for a beachside residence.&nbsp;

St Lucia by Bottega House is expected to launch to market in November, with construction anticipated to be completed mid 2029.

[smartcode_project_cta:default project_id=151826]

Joel Robinson

Bottega House to make Brisbane debut with St Lucia riverfront apartment development

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> is advancing its affordable apartment model into Brisbane with the acquisition of another site at Cordelia Street in South Brisbane for $27 million.

Sherpa, which has a $1.7 billion pipeline across Southeast Queensland, intends to bring a cohort of apartments exclusively for first homebuyers into its proposed 186-apartment project to be built at 2 Cordelia Street.

The Sherpa model has already been incredibly well received from their Gold Coast projects, where Sherpa Group set aside a number of apartments exclusively for first homebuyers.

The new $320 million project marks Sherpa Group's second development in Brisbane, following its $255 million Symphony project, also on Cordelia Street, which is currently under construction.

Symphony will deliver 146 apartments across 28 levels, offering a mix of one, two and three-bedroom apartments. With 114 already sold, construction by <a href="https://www.apartments.com.au/builders/lps-group">LPS Group</a> is scheduled for completion in 2028.

[smartcode_project:default project_id=7574 project_image_fid=351654]

Sherpa Founder, Christie Leet, said the company was excited to be venturing into Brisbane for its second residential project.

“We’re big believers in the future of Brisbane as we lead into the 2032 Olympics and beyond,” Leet said.

“The success of Symphony has guided us into what will be our second project and we look forward to submitting our plans with council soon so we can deliver yet another quality project to the inner city residential market.

“Our Flourish model has been very well received both in Brisbane and the Gold Coast, and we’re excited to be able to offer some of these apartments again exclusively to first homebuyers to help get them into the property market.

“The model has been extraordinarily well received in our previous projects and it is something we are committed to moving forward.”

2 Cordelia Street will be designed by <a href="https://www.apartments.com.au/architects/hal-architects">HAL Architects</a> &amp; Finegrain and will include Sherpa’s signature residential amenities including pool, gym, recreation, wellness and work from home spaces.

The project will feature ground-floor commercial space, creating a vibrant amenity for residents and the surrounding community.

A development application will be lodged with Brisbane City Council in August on the code compliant site and will be launched to the market early 2027.

Sherpa acquires new site for second Brisbane apartment tower

One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.

Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.

The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" />

Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.

Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.

The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.

Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.

The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.

That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.

The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.

"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" />

Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.

The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.

The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.

According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.

The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.

A significant component of the proposal is the revitalisation of Blue Street Plaza.

The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.

Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.

Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.

Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.

&nbsp;

&nbsp;

fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

&nbsp;

FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
&nbsp;

&nbsp;

&nbsp;

&nbsp;

&nbsp;

First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

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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