The lack of available housing in Sydney will take up to five years to correct, according to one of Australia’s largest property developers.
Stockland chief executive Mark Steinhart said despite efforts to release land for housing and the construction of new apartment blocks in the nation's biggest city, it would take a long time to correct the undersupply in the market.
"It will take probably four or five years to address the undersupply in Sydney," he told a property forum on Wednesday.
"The only way you can do it is through the release of land and through densification, and that's certainly the approach governments are taking, but it takes time."
Mr Steinhart's comments follow federal Treasurer Joe Hockey's dismissal of claims Australia was in the midst of a property bubble.
The treasurer said talk of a bubble in the property market was "lazy analysis" and ignored supply issues.
House prices have risen more than 10 per cent in the past year, according to property research business RP Data, while Sydney prices have jumped almost 24 per cent in two years.
Former treasurer Peter Costello told the property forum in Sydney that he believed it was state government taxes on the release and transfer of land that were restricting supply.
"Building a house is comparatively cheap," he said.
"What is expensive in Australia is land.
"So we have an increasing demand but we have quite a restrictive supply of land."
Mr Steinhart said each of Australia's major metropolitan cities faced supply issues, though the situation was most pronounced in Sydney.
But he said Australians shouldn't expect the recent housing market boom to continue and prices would grow at much more moderate rates in the next few years.
He expects Sydney prices to rise by about five per cent a year, while Brisbane and Melbourne are likely looking at growth of around 4.5 and 3.5 per cent, respectively.
But prices were likely to remain flat in Perth due to the slowdown in mining investment.