But while many other measures of Australia's economy took a hit during 2020, housing prices seemed to increase not just in the capital cities, but around the country.

So how did housing prices get so high, and where is the market set to go as the nation recovers from the COVID-induced economic downturn?

Despite some of the gloomiest prediction from housing market experts this time last year, about a steep drop in the value of housing, property prices nationwide have experienced a large increase in growth.

House prices across the country have risen at their fastest pace in more than three decades, with Sydney, Canberra, Melbourne and Brisbane all reaching record highs.

The most recent data from CoreLogic for the year ending in March 2021 showed that national house prices increased as much as 6.2 per cent, with a median value nationwide of a little more than $614,000.

In the same time period, the combined average price for a house in the eight capital cities rose by almost 5 per cent in the past year to just under $694,000.

It was an even larger rise for those in the regional areas, which spiked by more than 11 per cent during the year where COVID restrictions dominated people's lives.

It may be no surprise that Sydney had the highest median house value for the 12 months to March, at $928,000, followed by Melbourne, Canberra, Hobart, Brisbane, Perth, Adelaide and Darwin.

All major capital cities recorded an increase in their median price in the past 12-month period, some as much as 14 per cent.

For most of last year, growth in regional markets outpaced that of the capital cities.

However, the most recent property price figures showed capital city growth eclipse the rate in the bush.

While there hasn't been one single factor that has contributed to the large rise in property prices, experts have said part of the reason is due to some of the economic responses employed through the pandemic.

Among them was the Reserve Bank's decision to slash interest rates.

The Reserve Bank cut interest rates to then-historic lows of 0.25 per cent at the beginning of the pandemic in March, before lowering it again in November to 0.1 per cent.

Head of Australian research at CoreLogic Eliza Owen said the cheaper cost of debt and low mortgage rates have also triggered economic conditions that led to increased housing prices.

"It's not unprecedented for housing values to rise during an economic shock," Ms Owen said.

"At the end of the day, some of the reason has to do with the low mortgage rate, along with more recent factors such as the economic and COVID recovery, along with low levels of supply."

Associate professor at the Australian National University's Centre for Social Research and Methods Ben Phillips said a lack of supply of new houses entering the market during 2020 also contributed to the price rise.

"People haven't been spending money much elsewhere, so there's been more money coming through in housing, and the record low interest rates have helped that," he said.

"The fear of missing out could also be another reason why, and people might not want to wait for another six months or so."

Price increases have also been felt quite severely in regional areas during the past year.

Ms Owen said that was in part driven by some of the larger changes to Australian society caused by the onset of COVID-19.

"Regional housing markets were resilient to the downturn, and part of that was to do with international migration," she said.

"Sydney and Melbourne accounted for 63 per cent of overseas arrivals prior to the pandemic, so when the international borders closed, it created a shock there, but regional markets maintained a pretty strong level of demand.

"Other factors were internal migration. Those in the regions didn't go to cities for uni or for jobs, and as a result, the number of property listings in regional areas stayed lowed and that kept kept prices buoyant."

Many experts say it could still be too early to tell just how long the rise in property values would last for before drops are seen.

Associate Professor Phillips said the situation could change due to many people coming off JobKeeper payments, with those subsidies proving an economic lifeline to people during the pandemic.

"There seems to be momentum in the market, and I wouldn't be surprised if it will stay like that for the rest of the year," he said.

"However, the removal of JobKeeper may affect regional markets more so than capital cities."

Ms Owen said potential changes to lending regulations could also bring drops in prices in the near future, after some lending changes in 2017 led to a slight downturn.

"The outlook for the rest of the year, despite headwinds, [is] for the market to continue to increase."

However, not all experts say the increase will continue.

Canberra economist Ian McAuley, a fellow at the Centre for Policy Development, said interest rates were bound to increase after reaching record lows.

He said that the increase would catch many people, who had hoped to take advantage of the low rate levels, off-guard and leave them in financial strife.

"There will be lots of ... people who are getting themselves into debt [due to the property market conditions]," he said.

"People are judging their capacity to take on a mortgage based on the low interest rates, not realising that they will go up, and that's going to come sooner rather than later."

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