A Commonwealth Bank economics issues paper predicts house prices in Australia to jump by 16 over the next two years.
The country is set for another housing boom with prices in Melbourne forecast to rise by 7 per cent this year, with some even higher numbers in some of the other major capital cities.
It's a far cry from the dire situation during the pandemic's early days last year.
"The negative impact that COVID-19 had on Australian property prices turned out to be much more muted than almost any forecaster expected, us included," Commonwealth Bank head of Australian economics said in the paper.
"We were earlier than most, however, to recognise this and revised our call in September 2020 to look for a smaller peak-to-trough fall and a decent lift in prices over 2021.
"But even then, the rapid growth in new lending over the second half of 2020 was stronger than we anticipated.
"The increase in new lending is now feeding into higher prices for bricks and mortar."
Mr Aird says he expects this trend to continue over the 2021-22 period, despite a housing boom seeming so unlikely such a short time ago.
"New lending has lifted sharply. Dwelling prices are rising briskly in most capital cities and turnover is up significantly on year ago levels.
"The boom is being driven by record-low mortgage rates coupled with a V-shaped recovery in the labour market
"Borrowing rates, which are the single biggest driver of prices in the short run, remain below the rental yield in most markets across Australia."
BIS Oxford Economics economist Maree Kilroy agreed on the strong house price forecasts but points out the price rises would be somewhat offset by record-low interest rates.
"It may sound strange, but housing affordability has improved," she told Domain.
"While we talk about prices getting back to pre-pandemic levels, we've also had interest rate cuts since then.
"Houses may be back to being as expensive as they were in 2017 but the environment is completely different to what it was then - the cost of borrowing is far cheaper now."