The most expensive sector of the housing market is slowing rapidly, according to CoreLogic’s stratified hedonic home value index.
“The stratified hedonic index measures the change in values across three broad value based segments of the housing market: the most affordable 25% of properties, the middle 50% of properties and the most expensive 25% of properties,” said Cameron Kusher, research analyst at CoreLogic. “The index provides valuable insight into how different segments of the market are performing.”
Over the March quarter, national data shows that dwelling values were down by 0.5%. However, diving deep into the data reveals that the modest fall in values was confined to the most expensive quarter of the market.
“The most affordable properties increased in value by +0.7% compared to a +0.3% increase across the middle market and a -1.1% decline across the most expensive properties,” Kusher said.
Over the past year, dwelling values within the least expensive quartile rose by 0.7%, middle 50% values were 2.7% higher, and the top 25% values were 0.1% higher.
“With value growth slowing, the trends of the past are being repeated with the most expensive properties experiencing the most rapid slowdown in value growth,” Kusher said. “During the growth phase, it was these same properties that were also recording the highest rate of capital gain.”
Over the past 12 months, the most expensive properties have recorded the biggest value falls (-5.7%), followed by the middle market (-0.9%). The most affordable market segment managed some moderate growth (+0.6%).
Outside Sydney, the strongest annual growth was recorded in the middle 50% (+5.6%), followed by the low segment (+4.1%) and the top 25% (+3.7%).
Values have increased over the past year across each segment of the market, with the most moderate increases recorded across the priciest segment (+1.6%), then the middle 50% (+6.2%). The most affordable suburbs recorded double-digit growth (+11.3%).
In regional Victoria, the most expensive suburbs have recorded the strongest value growth (+4.7%), followed by the middle suburbs (+3.2%). The most affordable suburbs saw values rise by 2.4%.
While annual growth has been quite moderate, the middle valued suburbs recorded the strongest growth (+1.1%), followed by fairly similar growth rates across the most affordable suburbs (+0.9%) and the priciest suburbs (+0.8%).
The priciest suburbs were the only ones in which values have increased over the past year (+2.4%). Values were lower in the middle (-0.8%) and affordable (-3.5%) segments of the market.