Just two years after the last surge in housing prices killed the hopes and dreams of young Australians, it appears nothing has been learned.

As much as it might put a smile on the face of home owners, Friday's CoreLogic house value index is actually highlighting the failure of monetary and fiscal policy.

The logical conclusion of extreme monetary policy intervention and the refusal to engage in fiscal policy is now playing out at the Saturday auctions in the suburbs of Sydney and Melbourne. Credit:Peter Rae

On an annualised rate, Sydney and Melbourne house values are growing at more than 21 per cent. In the past four months, the median house price in the two cities has jumped by more than the minimum wage (which is a touch over $37,300).

This has occurred as the Reserve Bank of Australia (RBA) has cut official interest rates to a record low of 0.75 per cent while lending standards set by the Australian Prudential Regulation Authority have been loosened.