Australia isn't going through a housing bubble, says ANZ chief executive Phil Chronican, but state and federal governments aren't doing enough to address serious housing issues.

Speaking at the American Chamber of Commerce lunch in Sydney, Chronican said that a shortage of land release was contributing to making Australia one of the world's most expensive countries for real estate.

Comparing Australian property prices with those of land-starved Hong Kong and Singapore, Chronican believes that short-term government policies, such as the first homebuyer stimulus, are increasing demand and pushing prices further north.

"We need to refrain from pursuing short-term policies that add to demand-side pressures," he said. "If we really want to help people into homes, we need to address the supply-side issues, not add to the demand that drives prices up."

"We have seen what can happen when [governments] get it wrong in the case of the first-home owner's grant. These grants were capitalised against house prices so quickly they didn't so much benefit first-home buyers," he added. "It was the first-home seller's grant really."

He went on to suggest that the thorny issue of negative gearing was also a key driver of unaffordability in the Australian housing market, and recommended that now may be the time for the government to look at reining in the tax break.

''Governments might want to look at whether the current extent of negative gearing tax breaks are fostering an unhealthy focus on housing as an investment vehicle, thereby compounding affordability issues,'' he said.