Perth Housing Market Grapples with Persistent Supply Shortages
In a recent briefing, UDIA WA hosted Tim Lawless, a renowned property data expert and Cotality Asia-Pacific Executive Research Director, to dissect the state of Perth's housing landscape. Lawless, celebrated for his ability to transform complex data into actionable insights, provided a detailed analysis that underscores the critical challenges facing Western Australia's capital.
Affordability Declines Amid Soaring Prices
Lawless highlighted what many residents already experience firsthand: a sharp decline in housing affordability coupled with an ongoing supply crisis. Over the past five years, Perth home values have skyrocketed by an astonishing 89 per cent, equating to a $550,000 increase. This surge has far exceeded the national average, placing immense pressure on prospective buyers.
Despite signs of growth moderating since late 2025, prices continue to climb, with the median dwelling value now hovering close to $1 million. This sustained escalation is fueled by robust demand, driven by economic expansion and low unemployment across the state, set against a backdrop of persistently constrained supply.
Supply Pressures Intensify Across Sectors
The supply crunch is particularly acute in the new land market, where Perth's vacant land prices rank as the second highest among Australian capital cities, trailing only Sydney. Developers are struggling to ramp up supply to meet the surging demand, exacerbating affordability issues.
In the rental sector, limited stock in both new and established housing markets has kept vacancy rates extremely tight. According to Cotality data, Perth's rental vacancy rate stands at just 1.2 per cent, pushing median rents to $759 per week for houses and $682 per week for units. Alarmingly, 34 per cent of household income in Perth is now required to cover rent, surpassing the national average of 33.4 per cent.
Glimmers of Hope Amid Ongoing Challenges
While these figures paint a stark picture of affordability and availability woes, Lawless pointed to encouraging developments. Recent months have seen improvements in dwelling approvals and commencements across Western Australia, reflecting the industry's dedication to boosting supply. These efforts are bolstered by targeted housing policies from the State Government.
However, the path forward remains daunting. Maintaining momentum is crucial, and collaboration among all stakeholders—including various levels of government—is essential to deliver the housing supply that Western Australians urgently need. As the market navigates these complexities, the focus must remain on addressing the core issue: supply still defines Perth's housing challenge.
