Australian police are recommending a bravery award for a five-year-old boy who alerted the rest of his family that their house was on fire at Tahmoor, southwest of Sydney.

Police said Harry Haywood acted heroically after he woke early Thursday morning to the smell of dense smoke in the house where his family had been living for about four months.

He alerted his mother and her partner by screaming and then managed to find the bedroom where his two sisters, aged six and nine, were sleeping.

The family escaped from the house just before the fire engulfed the home, completely destroying it.

Police said the situation would have been tragic if the boy had not woken the rest of the family.

Harry's mother, Nicole, said the family is lucky to be alive despite losing all its belongings.

"My children's lives mean the world to me," she said. "As long as I didn't lose them, then I'll always be happy."