The ACT has leapt from sixth place to joint third in CommSec's quarterly State of the States report and now sits alongside the Northern Territory.
NSW is the best performing economy for a sixth consecutive quarter, edging a little further ahead of Victoria.
The big change in the ACT is attributed to a lift in equipment investment and sharp rise in homing building.
Equipment investment in the September quarter was up 12.6 per cent on a year ago, while dwelling starts were up 44.3 per cent.
"What we are seeing is more people are coming to the territory, particularly from overseas," said CommSec chief economist Craig James.
"They have got to have somewhere to live and that creates demand for housing."
Mr James can only speculate on what is drawing migrants to the ACT.
Victoria led the way on population growth in the September quarter 2015 followed by the ACT. Source: CommSec
"Unfortunately we only just have the numbers; we don't have the reasons why people are deciding to come to a particular destination."
"It may be that there is some attraction from the lower Australian dollar and that causes more people to come to Australia more generally."
"But also the attraction of the strong education sector in the ACT."
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