The year 2025 has been a period of intense pressure and significant challenge for Western Australians seeking a home, according to Urban Development Institute of Australia (UDIA) WA President Grant Shepherd. A perfect storm of strong population growth and constrained supply has pushed the state's housing market to a critical point, affecting buyers and renters alike.
The Driving Forces Behind the Crisis
Western Australia recorded the highest population growth rate of any Australian state throughout 2025, placing unprecedented demand on housing. This surge, combined with a tight supply of new homes, has created a severe shortage. Rental vacancy rates have stayed at record lows, and while low unemployment and a robust economy are positive signs, they have further strained the housing system.
The most direct consequence has been a sharp decline in affordability. Data from the UDIA WA Urban Development Index reveals that the average price for new residential land in Greater Perth climbed to $377,535 in the September quarter. For established homes, the situation is even more stark, with the Real Estate Institute of Western Australia (REIWA) reporting a median house price of approximately $830,000. The median weekly rent has also risen sharply to $700.
Political Focus and Policy Responses
The severity of the issue made housing a central theme in both state and federal elections earlier in the year, which resulted in decisive victories for Labor governments. Campaigns across the political spectrum heavily featured policies aimed at unblocking supply bottlenecks and speeding up the delivery of new homes.
Following the elections, a series of initiatives were launched to support housing delivery. These included:
- Increased and more targeted funding for essential enabling infrastructure.
- Efforts to unlock residential development potential on State Government-owned land.
- New incentives to encourage diverse housing types like townhomes and apartments.
- Enhanced buyer support, including the expansion of the Federal Home Guarantee Scheme and raised stamp duty thresholds in WA, assisting more first-home buyers.
A Path Forward for 2026
Grant Shepherd acknowledges that while 2025 has been undeniably difficult, the proactive stance taken by both government and industry represents a meaningful step in the right direction. He emphasises that ensuring a strong pipeline of development-ready land remains critical to providing greater choice and improving affordability for all Western Australians.
"While there is still much work to be done, these measures have represented meaningful steps in the right direction throughout the year," Shepherd stated. He views the collaborative approach to addressing supply as a positive outcome from a challenging year and expresses optimism about building on this momentum as the state moves into 2026.
