Housing supply a balancing act: Hockey

Treasurer Joe Hockey says Australia should not fall into the trap of an over-supply of housing.

Mr Hockey says strong demand in cities like Sydney needs to be addressed, but across the country there's been a "significant increase in supply".

"You have particular troubles in markets where supply exceeds demand - exhibit A, China; exhibit B, Ireland; exhibit C, the US," he told reporters in Canberra on Wednesday.