If August’s house price growth rate in Sydney and Melbourne is maintained for the next year, these markets will have risen by a staggering 19.2 per cent and 16.8 per cent respectively, retracing all the falls it experienced over the past two years – and then some.

Such an outcome would propel our two largest property markets back into bubble territory, which would set off the same set of alarm bells as last time around. Property investors would be off to the races and bank profits could receive a shot in the arm.

But for struggling first home buyers it would be a disaster.

Sydney and Melbourne house prices surged in August. Credit:Peter Rae

That said, economists are not predicting an outcome this extreme, but those who had taken a more conservative stance and called out a very modest rebound will need to reassess their models.