The expanded 5 per cent deposit guarantee scheme is increasing competition at the lower end of the market.
Since the scheme was expanded on 1 October last year, properties below the price caps have grown 6.7 per cent in value, nearly twice the 3.6 per cent recorded for homes above the thresholds.
Sydney shows the sharpest divide, with homes under the $1.5 million cap rising 4.1 per cent over six months while those above fell 1.1 per cent.
The share of suburbs with a median house value below the price caps has dropped from 48.6 per cent nationally in September to 39.5 per cent by March.