In the US, one of the main reasons given for the housing bubble was a result of an “over-supply of housing“.
In New Zealand we did not build that oversupply of housing even though population rose quickly pushing prices up. This was because it was very difficult to get consents and we had a substantial shortage of builders 🙂
This is why we are unlikely to see a free fall in house prices like the one seen in the US. Our bubble was only in the expectation of house prices – it did not feed into excessive construction and so when the price corrects it will be less harsh.