Australia’s housing boom has no end in sight as record-low rates and improved economic conditions entice buyers back into the market.

Less than 12 months after the federal government put the national economy into temporary lockdown, property prices across the country are soaring as supply fails to meet demand.

Values rose at the fastest pace since 2003 in February, with prices rising in every capital city and regional area, according to property analytics firm CoreLogic.

And analysts say prices will continue rising for the foreseeable future.

Government incentives, such as HomeBuilder and the First Home Loan Deposit Scheme, lowered the barriers to entry for first-home buyers, while a faster-than-expected jobs market recovery gave buyers the confidence to put down a deposit.

Analysts say the market faces major challenges in the coming months, with the federal government due to wind back several major support programs at the end of March.

But record-low interest rates and the ‘fear of missing out’ are expected to offset these concerns and drive prices in Sydney and Melbourne past record highs before the end of April.

“The conditions are probably in place for further price rises. Whether it can sustain the momentum that we saw in January and February is less clear,” EY chief economist Jo Masters said.

Asked whether the end of JobKeeper could lead to a wave of forced sales at the end of March, Ms Masters said this was unlikely as the banks had not found widespread stress in household balance sheets.

She said this was partly because jobs had come back much faster than expected, with the unemployment rate falling to 6.4 per cent in January from a peak of 7.5 per cent in July.

“A bank doesn’t foreclose on your mortgage straight away, [either],” Ms Masters said.

“There’s a period where your mortgage needs to be in arrears for six to 12 months before a bank starts to act on that.”

Low stock levels are also putting upwards pressure on prices.

CoreLogic data shows the number of properties advertised for sale nationally over the 28 days ending February 21 was down 26.2 per cent on 2020 levels.

CoreLogic research director Tim Lawless, who described the current upswing as a “broad-based boom”, said an uptick in reports lodged by real estate agents when preparing new listings suggested more properties would come on to the market in March.

But he said the boost in supply was likely to be met by rampant demand.

This means price growth is expected to remain strong until at least the second half of the year, at which point the market may slow down as more and more housing becomes unaffordable for increasing numbers of people.

“There is a phasing out of a lot of the government incentives, as well,” Mr Lawless said.

“From June and July, we will see stamp duty discounts no longer apply in New South Wales and Victoria. HomeBuilder is no longer available after March. And a lot of the fiscal supports around incomes are winding down at the end of this month, too.”

Mr Lawless said the current housing boom was a continuation of the upswing seen in Australia between June 2019 and February 2020, which triggered renewed fears about housing affordability and caused serious headaches for the Reserve Bank of Australia.

He cited a slowdown in the rate of price growth before the pandemic as evidence that low wages growth and broader economic weakness could soon moderate the current rush.

“Sydney’s still got to recover 1.1 per cent before it’s back at 2017 highs. Melbourne still needs to recover 1.7 per cent before it’s back to its March 2020 high,” said Mr Lawless, noting such records would likely be broken within “a month or two”.

“So we might start to see affordability come into more focus after that.”

The Reserve Bank will hand down its next interest rate decision at 2.30pm on Tuesday.