National property prices are expected to increase by up to five per cent in 2023, having already lifted more than two per cent since the start of the year.

The strongest growth is expected to be in Perth with growth of between four and seven per cent, according to a report by REA Group.

Sydney and Adelaide property prices are forecast to increase by between three and six per cent, while Brisbane is heading for between one and four per cent growth.

Melbourne prices are predicted to grow at a slower rate of up to two per cent, although they might record a small dip by the end of the year.

The forecasts are based on a prediction that the RBA’s series of interest rate rises is nearing its peak.

Report author Cameron Kusher said a limited supply of properties for sale remained a key factor contributing to buyer competition and price growth.

“We saw price increases despite rising interest rates and reduced borrowing capacities and anticipate moderate price increases to continue over the coming months,” he said.

Mr Kusher said the outlook for 2024 was less clear with a large cohort of fixed-rate borrowers’ mortgages set to expire from current interest rates of around two per cent and reset to around six per cent.

“Interest rate changes act with a lag and, as such, the possible impact of higher repayments on these borrowers won’t be seen until 2024,” he said.

“At this stage, we are forecasting modest price growth in 2024.”

By Duncan Murray in Sydney