"Is there an issue of house prices in Sydney? Yes there is," former Treasury secretary Martin Parkinson told a QUT Business Leaders Forum in Brisbane on Tuesday. "Do we have a bubble? I think that is the wrong question to be asking."

Parkinson said we should instead be asking why house prices are so high. He thinks there are two reasons: "first Sydney is becoming an international city and there has been an inability of state governments to take a sufficient forward view of what is needed to be done for land release," he added.

Parkinson said expanding supply was the only way for the government to get house prices to fall or at least grow more slowly. "Supply is the problem," he said. "If you don't do anything to increase housing supply and you simply talk down prices what's the point? You won't get anywhere."

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