The housing market in Australia is very overvalued, having been inflated artificially (in part due to negative gearing - https://en.wikipedia.org/wiki/Negative_gearing) over a long period, also partly attributable to artificially created demand. Although prices are starting to come down in the major cities now (ie. the property bubble has pretty much burst over the last 12 months).

Another difference is that historically Australia has also had poorer quality of housing as well, eg. inadequate insulation (https://www.abc.net.au/news/2017-01-03/why-bad-housing-desig...). But yes we do have some pretty big houses, at least compared to most of Asia, much of the UK etc.

>The housing market in Australia is very overvalued, having been inflated artificially (in part due to negative gearing ...

But in Australia you cannot tax-deduct the interest on your own home, whereas in the US (IIRC) you can. I would expect the artificial inflation to be higher under the US system.

The real causes of the high house prices IMO are: a) poor government policy, from federal to council level, the net effect of which is preventing the market to be adequately supplied with new housing; and b) a range of cultural factors (notably the image of housing as a safe investment, that is being cultivated with increasing desperation by the real estate industry) that results in channeling of investment into established housing.

There was a campaign in Australia to remove the income tax deduction on investment properties as it was cited as the cause of high property prices

What most people ignored is that it would spike rents and cause more short-term harm, especially as lending tightened

Everybody was casting for something to blame and ignored the most obvious solution staring them in the face - an increase of property supply (as you've said)

> also partly attributable to artificially created demand.

What is artificially created demand for real estate? Isn't all demand for real estate "real", whether as a home or an investment.

I could have worded that more clearly. In Australia's case, rules regarding foreign property ownership/investment have historically had a fairly big impact on housing demand, pricing etc. The government of the day is regularly lobbied by those who have a vested interest in seeing prices continually rise to relax those rules. I'll leave it at that.