The lower end of the housing market has vastly outperformed the top and middle segments over the past 30 years, as suburbs gentrified and incomes improved over time.

But the prospect of higher interest rates and relatively stagnant wage growth could cause the affordable markets to fall behind in the next decade, experts say.

‘‘The lower end of the market tends to be more sensitive to interest rates, and the record low rates had given it a disproportionate boost, enabling people to borrow more and more,’’ said Shane Oliver, AMP Capital’s chief economist.

‘‘But this segment is also more vulnerable to interest rate hikes because gearing tends to be higher and the market is dominated by first home buyers, who may have more limited financial capacity compared to those in the upper end.’’

Between December 1991 and December 2021, the lower end of the market rose by 448 per cent, the middle of the market gained 348 per cent and the high end climbed by 392 per cent, the Aussie Progress Report, compiled by CoreLogic, shows.

‘‘Interestingly, the biggest value gains for the past 30 years have come from the low end of the market,’’ said Eliza Owen, CoreLogic’s head of research. ‘‘This might make sense in the longer term as lower-value stock has had more room to grow, more regions have become gentrified, and incomes and quality of property have improved over time.

‘‘However, the lower end is unlikely to outperform in the next decades due to more stagnant wage growth across the board. It could also suffer from increased densification.’’

Dr Oliver said the upper end was likely to post stronger growth over the next two years, as it was relatively immune to higher interest rates.

In fact, the higher end of the market had already posted bigger growth in the past 10 years as buyers focused on traditionally blue-chip housing markets, Ms Owen said. ‘‘I don’t know if we will necessarily see the enormous growth in any segment of the market that has been delivered in the past 30 years, but there is a certainty and safety in high-end, quality real estate that may make it more resilient over time,’’ she said.

‘‘A lot of the highest end housing markets have retained their position in the past 30 years because, even though they are relatively desirable, they have generally [avoided] increased densification.’’

Vaucluse in Sydney’s eastern suburb kept its top position as the most expensive suburb in the country with a $8.625 million median house price, which had soared by 522.6 per cent over 30 years.

Bellevue Hill was the only other suburb to maintain its rank at No. 3 in the high-end dwelling market, with the median price jumping by 682.2 per cent to $6.52 million.

In the same period, Australian house values climbed 414.6 per cent and apartment values 293.1 per cent.

There had been seven periods of sustained increase in values at the national level, and seven periods of decline in the past three decades, the report said.

During the growth cycle, home values rose by a cumulative 34 per cent on average over 41 months. Meanwhile, periods of peak-to-trough declines have lasted an average of 12 months with an average value drop of 4.3 per cent.

‘‘With potential interest rate rises on the horizon and ongoing debate around where the housing market is headed, this can be a stressful time for aspiring homebuyers, but what is clear from the analysis is that property is a long game,’’ said Brad Cramb, CEO of Distribution, Lendi Group, parent company of Aussie.