Soaring home prices in Australia's biggest cities are driven by strong demand and a lack of supply, rather than indicating a "bubble," according to one of the nation's top economists.

"At a national level, a key reason for rising housing prices has been housing under-supply," HSBC Holdings' local chief economist Paul Bloxham wrote in a research note on Thursday.

"This also suggests that a significant fall in Australian housing prices, as occurred in the US and Spain during the global financial crisis, is unlikely."

Five years of red-hot growth have left prices in Sydney and Melbourne up 80 and 60 per cent since mid-2012, fuelling bubble concerns.