Research by CoreLogic using the stratified hedonic index shows that the most affordable 25% of properties, the middle 50% and the most expensive 25% recorded the greatest value growth over the past year. 
Over the 12 months to August 2017, the most affordable 25% of residential properties nationally recorded value growth of 2.9% compared to growth of 8.0% across the middle 50% of suburbs, and 11.4% growth across the 25% of most expensive suburbs.
Across all market segments the national annual rate of value change has started to slow over recent months according to research.
During housing market downturns, it has typically been the most expensive properties that have been hardest hit, while more affordable dwellings have been more resilient.
Over the past 30 years (August 1987 to August 2017) dwelling values across the most affordable 25% of properties rose by 1,517% compared to increases of 580% across the middle 50% of suburbs and 432% across the most expensive 25% of suburbs.
This highlights how affordability has deteriorated substantially at the more affordable end of the housing market.
Value changes across the three broad segments throughout the combined capital cities shows that over the 12 months to August 2017, the most affordable 25% of properties have recorded growth of 4.6% compared to 9.3% growth across the middle 50% of properties and a 12.2% change across the most expensive 25% of the market.
Similar to the national figures, in the event of a housing market downturn it has been the more expensive housing which has tended to see the greater value falls.
Across Australia’s regional housing markets for growth performance, the change in values has been much more moderate over recent years than that across the capital cities.
Over the past year, the 25% of most affordable properties in regional Australia have recorded value increases of 2.5% compared to a 4.6% change across the middle 50% and an 8.4% increase in the most expensive 25% of properties.
Growth in the affordable segment in regional Australia over recent years has been the strongest performed suggesting that demand has been for more affordable housing.
However, as the regional markets have picked-up over the past couple of years.
It has been the top 25% of suburbs that have outperformed.
This is likely to indicate demand for luxury housing outside of the capital cities has risen.
Looking at the annual change in dwelling values across the three market segments throughout the capital cities, Melbourne and Darwin were the only capital cities to record the greatest change in values over the year across the most affordable suburbs and the slowest growth across the most expensive suburbs. 
For all remaining capital cities, either the middle 50% of suburbs or the top 25% of suburbs have recorded the fastest rate of value growth over the year.
The result for Melbourne is likely due to the fact that Sydney and Melbourne are the strongest economies in the country and are jockeying to attract talent.
Melbourne has a significant competitive advantage over Sydney in terms of being able to offer more affordable housing and the data seems to suggest that lower priced housing is a big driver which has led to a surge in values across the lower and also middle segments of the market.
The stratified hedonic index offers another interesting look into the performance of the national housing market looking at how different segments are performing.
If the current housing market slowdown continues and turns into declines, watch for whether the most affordable sector of the market is relatively stronger performed than the more expensive segment.
With record high levels of household debt and significant first home buyer incentives over recent years the trends in a future downturn could be different to what has been seen in the past.
