FOMO - the fear of missing out - has returned to the Sydney and Melbourne property markets, with house prices in the two cities surging on the back of falling interest rates.

In a development that has some economists warning regulators may have to tighten lending standards, CoreLogic's closely watched home value index showed house prices in Melbourne bounced 2.4 per cent last month - their fastest rate in a decade - while in Sydney they jumped 1.8 per cent.

FOMO has returned to the Sydney and Melbourne property markets with prices growing at an annualised rate of more than 20 per cent. Credit:Rob Homer

Melbourne's house values have increased 5.7 per cent over the past three months, or almost 23 per cent at an annualised rate. The median house price in the city has climbed by $41,000 since July.

Sydney is not far behind, with prices up 5.3 per cent through the quarter, or 21.16 per cent at an annualised rate. Its median house price has soared by $53,320, or $580 a day, since the start of August.