The strength of Australian property prices, which continue to rise despite escalating interest rates, has confounded even seasoned real estate veterans like KR Peters Director Peter Nicolls.

According to CoreLogic, the national home value index increased by half a percent in April following a .6 per cent lift in March to be 1 per cent higher over the past three months.

The upward move in prices despite challenging economic conditions, has 'surprised' Mr Nicolls.

"I was surprised. I can't understand the current situation in which prices are rising again, when people's buying power has been completely smashed," said Mr Nicolls, who has seen many booms and busts over his  near half century in the property game.

"In most cases people's buying power has been reduced by $200,000 but that is not reflected in prices.

"Historically in the past when interest rates went up buying power was reduced by $100,000 and prices fell by about $100,000. This time that hasn't happened."

Mr Nicolls said there were several factors at play in keeping prices buoyant including a significant lift in net migration post-COVID and an ongoing lack of housing supply.

"There is also another phenomena no one is talking about, and that is the collapse of major builders across Australia which has caused home buyers to move away from building a new home for fear of the builder collapsing. Instead of building they are buying established.

"We had a certain per cent of the market buying new and that has basically been decimated, which was something that wasn't forecast or foreseen."

Mr Nicolls said he has never seen anything like the current situation.

"It feels as if the traditional property cycle no longer applies. The new time clock has spun out of control."

Mr Nicolls said what happens to prices for the rest of 2023 depends on the Reserve Bank of Australia and whether it continues to push rates even higher in an attempt to rein in inflation.

He predicts rates will hold in June.

"I don't think the Reserve Bank will put interest rates up again in the foreseeable future.

In May I thought they would wait and see the effect of the rises already announced as they flowed through, but they made the decision to go up another.25 basis points to 3.85 per cent."

Mr Nicolls said APRA's requirement that banks stress test people's ability to borrow money on a three per cent buffer, was adding to the problem.

"If interest rates are at 3.85 and the banks are putting on their own 2 percent, taking the rate to 5.85 and then APRA's 3 per cent on top of that, takes the rate people are being assessed on to 8.85 nearly 9 per cent.

"It's too onerous and needs to be looked at. If it was assessed at 2.5 per cent it would allow people to borrow a bit more."

Mr Nicolls said property price movements were "patchy" across different suburbs and that higher wealth buyers were pushing up prices in the middle price suburbs.

"People who were buying in the $3 million bracket are now probably buying around the $2 million mark. They're fuelling prices because they aren't buying at the higher amount."

Despite the current property market upending conventional wisdom, Mr Nicoll's advice to buyers remains the same - " go back to basics, do your homework and know what the real value is".

"If you believe a property fulfils your wish list I would advise to buy because it doesn't look like prices come down or ease dramatically."