Perth's aversion to high density living impacting housing supply

Perth property buyers continue to be enthralled with houses over units and this preference for size has major ramifications for the housing supply crunch.

View of suburban South Perth to the city skyline.
Perth needs to rethink its approach to higher density living if it is to address the housing shortage. (Image source:

Perth’s stature as a city of international appeal was recently confirmed in the latest Global Liveability Index by The Economist Intelligence Unit that marked Perth as one of the most liveable cities in the world, following a surge back up the rankings this year.

Add in the fact that recent ABS population figures revealed Western Australia secured the highest percentage increase in population for the December 2022 quarter and it is clear that people are starting to view WA as one of the best places to live.

The popularity of Perth was also highlighted through the results of a new report that found the number of property views and hard leads for new homes on increased over the first quarter of 2023 to now be sitting at the highest levels since March 2022.

Perth has a great story to tell, we just need to get better at spreading that message.

This was the takeaway from Cameron Kusher, Executive Director of Economic Research, REA Group, when he sat down with me for a recent episode of UDIA WA’s podcast The Urbanist LIVE.

Houses still favoured over apartments in Perth

Mr Kusher, who presented the report, said this is likely a sign of a renewed interest from buyers to purchase new.

“New houses are experiencing the strongest bounce back in views per listing,” Mr Kusher said. 

“New unit listings have seen a more modest recovery, which is a reflection of the continued desire from WA buyers for a house over a medium or higher density option.

“We may see housing preference evolve over time if more medium and higher density options emerge in and around Perth.”

The Western Australian Market: Data & Insights Report presented by also revealed median price increases for apartments and houses across the board in Perth and Peel as well as in most regional areas.

According to the report, as of 31 March 2023, the median price of a home in Greater Perth was 30 per cent above March 2020 levels, resulting in a median price of $608,000 for houses and $415,000 for units.

While the resilience in the market and the current popularity of Perth is great news on many fronts, it also clearly highlights the critical need for ongoing systemic housing supply shortages in WA to be addressed.

Planning needed to address WA’s supply issues

There is a lot of work to do to ensure our housing supply pipeline is sustainable in the long term so that we can deliver the land and housing our growing population demands.

All options must be on the table, from reducing the cumulative impact and cost of regulation, taxation and overly complex lengthy approvals processes on the delivery of housing supply, to leveraging Federal Government funding under the Housing Australia Future Fund and other incentives for the states to provide more social and affordable housing supply.

To this end UDIA WA is working with the State Government on ways of ensuring the best possible outcome for greater housing choice and supply is achieved.

This was highlighted most recently when we advocated for and welcomed the introduction of interim measures for public open space contributions for infill development, following the introduction of Draft Operational Policy 2.3 – Planning for Public Open Space.

While we have been clear that this draft policy as it stands is a major threat to the viability of infill projects and longer-term housing affordability and will ultimately impact the timely provision of desperately needed housing, the introduction of the interim measures allows the appropriate consultation period to take place without the policy being unduly applied.

This draft policy is one of myriad policy and legislative changes, and multiple layers of costs, that seem to be continually added to by Government, which if implemented will result in many projects not being realised. 

This will ultimately impact the provision of desperately needed housing.

Housing diversity and affordability

UDIA WA has consistently warned that infill development, particularly medium and high-density apartment projects are almost impossible to make stack up financially, with very few new apartment projects having commenced in the last year or so, and it is not looking promising for the forward pipeline.

We will continue our calls for the views of industry to be given due consideration in reconsidering this policy and for it, and other new or amended policies with implications for the provision of diverse housing supply, to be carefully examined through a housing affordability and equity lens.

They must also be considered holistically in the context of facilitating development to support Government targets for Perths growing population and aspirations to create a more compact, connected and liveable city.

The development industry has an excellent track record of producing exciting, beautiful, and liveable communities but we can only play this important role if the situation and circumstances also us to do so.

UDIA WA will continue working hard to ensure the best possible conditions are available for the creation of these communities and to allow Perth and WA to continue telling its awesome story.

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