Canberra house prices are expected to grow at the highest rate of any Australian capital city this year, with the latest report from ANZ forecasting a 24 per cent increase.
The bank has revised its 2021 forecasts after a stronger than expected performance across the housing market.
Canberra leads the price hikes, followed closely by Sydney and Hobart with a 23 per cent forecast increase, while national house prices are expected to rise 21 per cent by the end of the year.
Buyer demand has been strong throughout 2021, and CoreLogic has found Canberra's median house value has skyrocketed to $905,325.
ANZ senior economist Felicity Emmett said low interest rates were the main driver for such substantial increases across the country, while Canberra's stability throughout Covid had had an impact locally.
"Canberra really does stand out and I think that's because, to a large extent, many of the people in the ACT are probably insulated from the worst of Covid," she said.
"The fact that interest rates are low enables people to borrow a bit more but also because our spending has been limited over the past year.
"What we've seen is people have very high savings rates and they have a stock of money in the bank ... a lot of that is being poured into housing, whether it's for a new home or for renovations."
The price surge comes as no surprise to Ben Faulks, chairman and founder of Ray White Canberra, who said lockdowns, pent-up demand and availability of money have created the "perfect storm" for increased house prices.
"People haven't spent [as much money] on holidays and a lot of people have ended up having their stamp duty in their pocket, which is often a limit on people wanting to move, it's that extra transaction cost they've got to come up with," he said.
"And everybody's home has become their sanctuary, people are willing to stretch [their budget] to create a space that they can be locked down in for a period of time."
Despite current lockdown restrictions forcing auctions online, property sales remain strong across Canberra.
Since the lockdown began, Ray White Canberra has sold 20 properties under the virtual hammer, including a three-bedroom home in MacGregor to first home buyer Jess Orr.
After a stressful 12-month search, Ms Orr said she felt lucky to have secured a property.
"It was blowing my mind ... it really turns you off looking at a place, knowing roughly what it's worth, but just with the market, knowing in the back of your mind that you just won't be able to afford it," she said.
"Then you go to auctions and think you have a really good chance and it just goes so out of the park, you feel like you can't justify even looking [for a property]."
But in the end, a mid-week auction was the perfect time for Ms Orr to snag her first property, which ticked all the boxes for land size, location and its ability to be developed.
"It was the block size that I was interested in, and the house needed some work done, which I thought might turn some people off and might give me a little bit more of a chance," she said.
While property sales are currently strong, the ACT lockdown is putting pressure on the housing market, with a lack of new listings coming onto market due to restrictions on building inspections.
Ms Emmett has seen similar trends across the country but believes more properties may soon come onto the Canberra market as a result of the increased prices.
"That is what we tend to see when prices are growing quickly, then we see increased volumes [of listings] as vendors feel confident that they're going to get what they feel their property is worth," she said.