Housing supply a balancing act: Hockey

Australia needs to heed the lessons of other countries in the housing supply debate, says Treasurer Joe Hockey.

Treasurer Joe Hockey believes rents will rise if negative gearing is scrapped. (AAP) Source: AAP

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.