Economists’ predictions vary and forecasting is an inexact science — with the best available information experts tipped a 10 to 20 per cent property price drop at the height of the pandemic that never eventuated. However, the prediction offers insight into the magnitude of the possible jump as interest rates stay low and buyers feel fear of missing out.

House hunters could be forced to add hundreds of thousands of dollars to their budget by the end of the year or else make compromises, after new economist forecasts from ANZ tipped home prices to reach staggering heights. Melburnians will need to fork out an extra $149,772 under the predicted 16 per cent jump with the median house price reaching $1,085,845.

The trend is consistent across Melbourne a strong indicator that demand will be sustained with most queries coming from owner-occupiers rather than investors. Interestingly buyers are more interested in homes rather than units – working from home is now of the utmost importance.

It also appears that record-low interest rates have encouraged people to trade up with a significant shift toward searches for higher-priced dwellings.

The biggest challenge for the market remains the low volume of stock available and added that the amount of time properties are listed has fallen dramatically.