Famed investor Jeremy Grantham called it a "time bomb," saying "you cannot possibly miss it."

Local economist Steve Keen says "it is only a matter of time before the bubble bursts."

Local Morgan Stanley economist Gerard Minack said, "There's a word for a financial asset that's over-valued by 40%, so let's use it: housing is a bubble." 

I'm talking about the Australian housing market.

But rather than take my word for it, The Motley Fool is sending its crack Global Gains investing team on a 20-hour flight to check things out for themselves, firsthand. I'll be here to greet them.

One big loser
Of particular interest will be the dinner with the aforementioned Steve Keen, the country's most prominent housing bear. Unperturbed by losing a 2009 bet that Australian house prices would fall by 40% (and having to trek 125 miles and up the country's highest mountain), Keen continues to preach doom and gloom for the property market.

He's definitely got a point. And as we saw above, he's not alone. Australia, for all its virtues, including vast reserves of natural resources, just might be sitting on the last giant bubble.

To put housing prices into some perspective, the average Sydney house sells for around A$600,000. The average Australian wage is around A$65,000. As far as affordability goes, it's about as bad as it gets. According to research from Demographia, only Hong Kong is more unaffordable.

Low interest rates? Think again
One might be excused in thinking low interest rates have fueled the bubble. You'd be wrong.

The cheapest variable mortgage rates today are close to 8%. You can do the math, but for people with large mortgages, let me assure you there's not much cash left over each month for beer and prawns for the barbie.

And it could get worse. Just last week, Access Economics predicted the standard variable mortgage rate could reach close to 9% by the end of this year or early 2012.

A soft landing?
Yet for all the evidence of a housing bubble, most commentators are expecting prices to cool, rather than crash. And while Australia continues to ride the China-fueled commodity boom, it's hard to see a catalyst for the bubble to burst. After all, unemployment stands at just 5%, close enough to a level economists consider to be full employment.

But there are plenty of warning signs. The strong Australian dollar, currently trading around parity with the once-mighty greenback, is hurting inbound tourism.

Retailers are feeling the pinch from both sides, with high interest rates curtailing consumer spending, and the high dollar encouraging online shoppers to flock to sites like eBay, Amazon, and even Wal-Mart in search of a bargain.

So what gives?

China wants it, we've got it
It's all to do about China. That country's insatiable appetite for Australian commodities, whether that be iron ore from Rio Tinto (NYSE: RIO), coal from BHP Billiton (NYSE: BHP), or LNG from the giant Gorgon field off the coast of western Australia, a joint venture between ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), and Royal Dutch Shell (NYSE: RDS-A), they need it and Australia's got it, in spades.

The great Chinese mining boom is virtually single-handedly driving Australia's economy. Take it away, and pop goes the housing bubble.

Lest you think an Australian property crash won't affect you, think again. The big four Australian banks -- Commonwealth Bank, Westpac (NYSE: WBK), ANZ, and National Australia Bank -- dominate the market. But they have a heavy reliance on foreign money markets to fund their growth, and are already one of the world's biggest borrowers in global markets. A property crash in Australia will reverberate across global markets.

The lucky country
Australia is known as the lucky country. It has vast commodity resources, great weather, wonderful long sandy beaches, and an enviable outdoor lifestyle. The average life expectancy is 81.2 years, placing it fifth-highest in the world, significantly above the 36th-placed USA.

Lucky as Australia might be, the mining boom has its downsides. There is a two-speed economy: those relatively few people directly affected by the mining industry, and those not. Your average Sydney worker hates the boom, because it has the effect of adding to his or her mortgage stress.

Or not so lucky?
Whereas once Australia had relatively cheap, high-quality housing, according to Demographia, it now has the most unaffordable housing market in the English-speaking world.

And it's not only housing that's expensive. Some foreign tourists, with their weak currency compared to the surging Aussie dollar, have told me Australia is 20% more expensive than even London. Now for anyone who's lived in or visited London, that's saying something.

One exciting opportunity
Still, there's nothing better than experiencing things firsthand. The Motley Fool's U.S.-based Global Gains team is heading Down Under to check things out for themselves. Undeterred by massive cyclones, housing bubbles, floods, bushfires, snakes, spiders, sharks, cane toads, and temperatures above 100 degrees Fahrenheit, Global Gains advisor Tim Hanson has called Australia one exciting opportunity.

As well as meeting Steve Keen, Tim and the Global Gains team are meeting mining companies, mining services firms, agricultural names, and many other businesses that stand to benefit from the ongoing Asian boom.

As always, they'll be releasing a special report with their top stock picks from the trip upon their return home. If you'd like to follow along with them in real-time, simply enter your email in the box below. That way, they'll be sure to send you all of their notes from the field as they take them.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.