Perth's Housing Shortfall: Economic Realities Undermine Planning Progress
For nearly a decade, the housing debate in Western Australia has centered on planning reforms, with intense focus on zoning codes, height limits, density targets, and infill corridors. While many of these changes represent genuine advancements, planning reform alone is failing to meet the State Government's urban infill objectives. This gap is most evident around Perth's expanding rail network, where despite significant investments, housing density remains critically low.
METRONET Investment Falls Short on Housing Density
Since 2017, Western Australia has poured billions into METRONET, aiming to boost connectivity and urban development. However, the housing constructed around these stations continues to be overwhelmingly low-density, missing key opportunities for growth. A recent report from the Property Council of Australia, titled Turbocharging Perth's Transit Precincts, highlights this issue starkly. It shows that 80 percent of homes built in WA in 2025 were single detached dwellings. At the current pace, the report warns, WA will fall more than 18,000 homes short of the requirements set by the National Housing Accord.
Economic Barriers: The Core of the Problem
The shortfall is not primarily a planning issue but an economic one, and until this is acknowledged, targets will remain aspirational. Construction costs in WA have surged by approximately 45 percent since pre-COVID-19 levels, according to data cited in the report. Government fees, taxes, and charges add further pressure, with analysis indicating these can contribute over $39,000 to the cost of a single apartment, a burden ultimately passed on to buyers.
WA's constrained labour market exacerbates the situation, driving up expenses and leaving developers struggling to secure building contracts and navigate contractor bottlenecks once construction begins. Additionally, around many METRONET stations, achievable sale prices fall significantly short of what is needed to make apartment delivery financially viable. In this challenging environment, a development can be approved and ready to proceed but remain on hold indefinitely because feasibility remains out of reach.
Persistent Challenges and Unheeded Recommendations
This observation is not new; the Property Council of Australia's 2023 report, Transit Precincts: Perth, Get Onboard, identified many of the same barriers. Three years later, those recommendations remain, as the Property Council states, "as relevant today as when we published them." The lack of progress underscores the need for a shift in focus from planning to financial solutions.
Call for Targeted Financial Interventions
What is urgently required is a more serious financial conversation. This includes targeted incentives to offset development costs in transit precincts, land tax relief during construction phases, more creative deployment of government land to reduce holding costs, and access to more affordable development finance. For the billions invested in rail to deliver their full return, the economics of building beside those stations must be viable. Currently, across much of the network, they are not, highlighting a critical need for policy adjustments to bridge the housing gap and achieve sustainable urban growth.
