Perth land prices top $400,000 as supply crunch deepens

The Perth residential property market continues to strain against supply shortages as the latest data from UDIA WA shows that the average price of new land has now reached above $400,000.

While Perth was once a haven for those looking for more affordable housing options, prices have escalated significantly in the last few years off the back of ongoing supply shortages and high demand.

The significant demand for new homes is being driven by the highest population growth in the country, strong economic indicators, low unemployment and an enviable lifestyle that attracts people to want to live, work and play in WA.

Land reaches record price

The UDIA WA Urban Development Index (UDI) for the December 2025 quarter has revealed the average price of new land in Greater Perth has reached $404,150.  That is a 6.3 per cent rise compared to the previous quarter and a 16 per cent increase over the year.

The price rise is even more significant when you look at the five-year rolling average price of land, which is just $284,796.  The Perth market has clearly experienced incredible growth in just a short period of time.

On top of population growth and the strength of the WA economy, we are also seeing the impact of the Federal Government’s 5 per cent deposit and Help to Buy schemes flowing through to land sales which is further driving demand at a time when supply is limited.

The lack of supply is also impacting on buyer choice in the market, with very few lots left on the market at the end of the December 2025 quarter.

As of 31 December 2025, the number of lots on the market in Greater Perth was down 33 per cent, to just 250 lots. That is well below the five-year running average of 1,180 lots.

While lots on the market are down, construction levels have increased to all-time highs as developers work hard to deliver more supply to the market.

The number of lots under construction estimated for release within the next 12 months is up close to 12 per cent in Perth, and up 28 per cent compared with last year.

While increased construction levels are promising for future supply, we can see that is still not enough to meet demand and falls short of meeting the Federal Government’s Housing Accord Targets of 25,000 new homes per year for five years.

The increasing price of land in Perth also seems to be having an impact on investor activity. While investors have been attracted to the Perth market in recent years due to its relative affordability compared to other capital city markets, this trend is moderating.

This quarter, 45.5 per cent of buyers in the new land market were first home buyers, 39.5 per cent owner-occupiers and just 15 per cent investors.

That is compared to an investor peak of 36.5 per cent market share in the December 2023 quarter.

Established housing values also surging

The trends we are seeing play out in the new land market, are being reflected in the broader Perth housing market, as outlined by Cotality Head of Research Tim Lawless at a recent UDIA WA industry event.

Mr Lawless outlined how Perth home values surged 89 per cent in the last five years, which is an increase of $550,000, significantly outpacing the national average.

While he did state that home value growth is now starting to moderate, it is important to note that prices are still climbing, and Perth’s median dwelling value is sitting close to $1 million.

Limited stock across both new and established housing markets has also kept rental vacancy rates extremely tight, at just 1.2 per cent in Perth, according to Cotality.

The shortage of available rentals continues to push median rents higher, with houses at $759 per week and units at $682 per week. Cotality data also shows that 34 per cent of household income in Perth is now required to pay rent, which is above the national average of 33.4 per cent.

While the data above looks grim for those looking to get into the property market, there is a glimmer of hope.

In line with increased new land construction levels, dwelling approvals and commencements across WA have also increased in recent months, particularly for units.

According to the Australian Bureau of Statistics total dwelling approvals trended up 2 per cent in December, which is marginal but a good sign of increasing activity.

The road to greater housing supply

These gains are encouraging, but the task ahead remains significant, but the momentum that has been achieved through the government’s targeted housing policy measures needs to continue.

All stakeholders, including all levels of government, need to work collaboratively to deliver the housing supply that West Australians urgently need.

To that end, UDIA WA has proposed several recommendations to the State Government in its Pre-Budget Submission to support land and housing delivery.

Our key asks in relation to the greenfield land market specifically include:

• Additional funding ($100 million) for Water Corporation for essential capital works.
• Funding of a full review into how DPLH forecasts land supply for the delivery of new homes.
• Funding the development of an online platform for WA’s planning and development system.
• Building on the initial $400 million investment in the Housing Enabling Infrastructure Fund (HEIF) to catalyse development in identified growth areas.

These key asks and several more are clearly articulated, including the estimated funding required for each ‘ask’, in UDIA WA’s Pre-Budget Submission.