WA Housing Supply Concerns Mount as Building Rates Slow
Amid a persistent housing supply crisis that continues to exert intense pressure on affordability throughout Western Australia, the latest Australian Bureau of Statistics Building Activity statistics present a complex and mixed picture for new home construction. The data highlights significant challenges in meeting housing demand, with implications for both renters and buyers across the state.
Decline in New Dwelling Commencements
Overall new dwelling commencements fell by almost four per cent during the September 2025 quarter, a decline primarily driven by an eight per cent drop in new detached housing starts. This moderate reduction in building activity was not entirely unexpected, as the greenfield land market had been operating at accelerated levels over the previous four quarters and was likely to experience some natural moderation.
However, while anticipated, this decline remains deeply concerning given that any sustained softening in construction activity will have direct and serious implications for housing availability and affordability. The ongoing shortage of homes continues to place significant strain on Western Australian families and individuals seeking secure and affordable housing options.
Mixed Recovery in Multi-Unit Sector
Despite the downward trend in detached housing commencements, the statistics reveal a continued recovery in the multi-unit sector, encompassing town homes and apartments. New unit commencements actually increased by eighteen per cent in the September 2025 quarter, reaching 1207 starts statewide.
While this represents welcome momentum in a market segment that has been delivering well under long-term average production levels for ten consecutive quarters between March 2022 and June 2024, it still falls significantly below the number of commencements ultimately required to meet ongoing demand. During that two-and-a-half-year period, Western Australia recorded an average of just 431 unit starts per quarter, which is sixty per cent below the twenty-year average.
Challenges to Project Feasibility
Multiple challenges continue to hinder project feasibility for multi-unit developments in particular, including persistently high construction costs that have led to an ongoing lack of supply in this crucial segment of the housing market. These economic pressures create significant barriers to delivering the diverse housing options needed across Western Australia.
The impact of these low supply levels manifests clearly in the rental market, where Cotality's monthly rental listings remain forty-six per cent below the long-run average. The effect on affordability is equally stark, with established unit prices rising nineteen per cent in the year to September 2025, reaching $552,500 – seventy per cent higher than September 2020 levels.
Falling Short of National Targets
While strong land development activity in new areas has propped up overall dwelling supply throughout 2024 and much of 2025, Western Australia continues to under deliver against the National Housing Accord target of 6390 dwellings per quarter. According to UDIA WA's analysis of Cotality and ABS data, over the four quarters to September 2025, the state fell short by an average of twelve per cent.
This shortfall equates to approximately 3000 fewer homes than required to meet established targets, highlighting the significant gap between housing production and community needs. These figures reinforce the urgent necessity for all stakeholders – including government, industry, and community representatives – to remain intensely focused on delivering the homes Western Australians need both now and for the future.
The combination of slowing building rates, ongoing affordability pressures, and missed housing targets creates a complex challenge that requires coordinated and sustained action across multiple sectors to ensure adequate housing supply for Western Australia's growing population.
