According to Mr Lawless, a housing ‘bubble’ suggests housing values increased too rapidly and are set to experience a rapid decline, a fate not likely to come to fruition in Australia.

“Bubble is a word that has been used pretty loosely in relation to Australia’s real estate market since about 2003. Generally I would disagree with using this term,” he told Real Estate Business.

“Across Australia’s capital cities, home values have increased by just 6.2 percent per annum over the last five years – a rate of growth that is in line with wages growth which has been 6.0 per cent per annum over the same time frame.

“Rather than experience a rapid decline, my view is that home values will continue to show modest growth due to the ongoing under supply of dwellings and rapid population growth that creates demand for housing.”

Mr Lawless said despite the fact that 14,000 new homes are approved for construction each month, the rate of new dwelling approvals is much lower than what is required – approximately 17,400 new homes need to be approved each month.

“With such strong demand for new housing and an ongoing undersupply together with improving consumer and business confidence, it is reasonable to expect that the building industry will lift their game and start producing more housing stock.  The strategic imperative is to deliver stock to the market that is aligned with consumer demand.   That means a focus on developing affordable and well located housing stock,” Mr Lawless said.