First home buyers flood Perth's land market as supply struggles to keep up

Perth’s new land market continues to demonstrate remarkable resilience, despite ongoing affordability pressures, supply constraints and a changing economic environment.

The latest UDIA WA Urban Development Index for the June 2026 quarter provides an important snapshot of a market that remains fundamentally underpinned by strong demand, even as sales volumes soften and prices continue to rise. The figures tell a clear story of Western Australians still wanting to own a home, but the market’s ability to meet that demand remains constrained by supply.

One of the most notable trends emerging from the June quarter data is the growing presence of first home buyers in Perth’s new land market. First home buyers accounted for 52 per cent of all new land sales during the quarter, while owner-occupiers represented a further 36 per cent, and investors made up just 12 per cent of the market.

That represents a significant shift compared to a year ago, when first home buyers accounted for 30 per cent of sales and investors represented 29 per cent.

The data suggests that government support measures, including the Federal Government’s 5 per cent deposit and Help to Buy schemes, are assisting more aspiring homeowners to enter the market.

At the same time, many developers have consciously focused their product offerings on first home buyers and owner-occupiers as part of broader efforts to address housing affordability challenges.

The trend in first home buyers entering the market is promising, at a time when housing affordability dominates public debate across Australia. It is encouraging to see that home ownership remains within reach for many Western Australians.

Compared to other capital cities, Perth continues to offer relatively affordable housing options, supported by a strong economy, solid population growth and a robust jobs market.

Affordability can only be maintained if housing supply keeps pace with demand.

The June quarter recorded 2,254 new land sales across Greater Perth, representing a decline of 9.2 per cent compared to the previous quarter. At the same time, the average price of new land increased by 3.5 per cent to $438,882.

Importantly, this reduction in sales volumes should not be interpreted as weakening demand. Feedback from developers across Perth consistently points to strong enquiry levels, waiting lists for new releases and ongoing buyer interest. The challenge is that there simply is not enough development-ready land coming to market quickly enough to meet that demand.

Perth’s booming southern corridor

Population growth continues to place significant pressure on the housing system, particularly in Perth’s major growth corridors.

This is especially evident in the southern metropolitan region, where major economic projects including Westport, AUKUS, Latitude 32 and the new Mandurah Hospital are expected to drive substantial employment and population growth over the coming decade. More than 183,000 additional residents are forecast to live in the region over the next ten years, creating significant demand for new housing.

The question for industry and government is not whether demand will continue to grow, because it clearly will. The question is whether we can deliver sufficient housing stock in the right locations and at the right time.

Despite the constraints, there are positive signs emerging on the new housing supply front. Construction activity across Perth’s greenfield market has strengthened considerably, with the number of residential lots under construction for release over the coming year increasing by 35.2 per cent compared to the same time last year.

The City of Wanneroo currently has the highest number of lots under construction, with 2,634 lots underway, while the City of Swan has 1,604 lots under construction, significantly above the five-year average.

These figures reflect ongoing confidence from the development industry and a commitment to increasing future supply.

While this increase is welcome, it will take time for additional lots to flow through to the market, and at the same time, a range of barriers continue to slow housing delivery. These include environmental constraints, fragmented land ownership, and critically, the funding and delivery of essential infrastructure such as roads, water, power and community facilities to enable housing delivery.

Addressing these challenges requires a coordinated response, with strategic planning matching with timely infrastructure investment and streamlined approval processes. Without these elements working together, it becomes increasingly difficult to convert future housing opportunities into development-ready land that can support growing communities.

Demand outstripping supply

Another emerging trend worth monitoring is the decline in investor participation. Investors remain an essential component of the housing market, particularly given the ongoing shortage of rental accommodation, and while first home buyer activity is positive, maintaining healthy levels of housing investment is equally important to support rental supply and housing choice.

Recent Federal Government changes to capital gains tax and negative gearing settings, combined with rising interest rates and broader economic uncertainty, may influence investor behaviour even further in coming quarters.

Ultimately, the June quarter data reinforces a message that has remained consistent for some time. Demand for housing in Western Australia remains strong, buyer confidence in home ownership remains resilient, but the challenge is ensuring enough housing can be delivered to accommodate that demand.

Whether it is first home buyers entering the market, growing families looking for more space, downsizers, or investors supporting rental supply, every market segment depends on an adequate pipeline of housing.

Increasing supply remains the most effective and sustainable way to improve affordability and support housing choice.

The fundamentals of Perth’s new land market remain strong. The priority now is ensuring housing delivery can keep pace with the needs of a growing Western Australian population.