Australian housing 'bubble' fears overblown: HSBC economist

Sydney

SOARING home prices in Australia's biggest cities are driven by strong demand and a lack of supply, rather than indicating a "bubble", according to HSBC's local chief economist Paul Bloxham.

"At a national level, a key reason for rising housing prices has been housing undersupply," Mr Bloxham wrote in a research note on Thursday. "This also suggests that a significant fall in Australian housing prices, as occurred in the US and Spain during the global financial crisis, is unlikely."