Perth's soaring land prices show few signs of slowing down

Perth property buyers continue to seek new land purchases but are finding it increasingly difficult to access a limited market.

The latest figures from UDIA WA’s March 2025 quarter Urban Development Index (UDI) reinforce important trends shaping the future of Greater Perth’s property market.

While the numbers show a decline in new lot sales, this shift is not reflective of a downturn in demand but further evidence of supply constraints continuing to impact the market.

It’s no secret Western Australia, like much of the country, is experiencing housing supply pressures. These figures support the need for government and industry stakeholders to continue to work in collaboration to deliver the homes we need.

With strong buyer interest still evident, state and federal governments have shown they are committed to addressing housing supply issues, and there is cause for optimism.

Lot sales data not the full story

According to the UDI figures, new lot sales in Greater Perth fell 8.3 per cent in the March quarter compared with the previous quarter, and 31.2 per cent compared to the same time last year. On face value, these figures suggest a slowing market, but that interpretation doesn’t tell the full story.

The reality is that developers are facing constraints on delivering new land, including infrastructure capacity and complex approval processes.

Given strong demand indicators and low housing supply levels, we are seeing an upward trend in new land prices, with the average price of new lots in Greater Perth now sitting at $359,470.

That’s a 7.2 per cent increase from the December quarter and a notable 30.7 per cent rise year-on-year. This growth reflects both a tightening supply and a broader confidence in the market. It’s a sign that people are still eager to build, invest and settle in the city.

While Perth has long held the mantle of being Australia’s most affordable capital city, that advantage has narrowed due to recent price growth, however, it remains in a favourable position compared to the eastern states.

With prices remaining competitive, Perth is still seeing strong interstate migration, renewed interest from investors, and continued optimism from first home buyers, particularly as policy settings begin to shift in their favour.

One of the most encouraging signs from the March quarter is the return of first home buyers to the market. After facing challenges from rising costs and limited availability, this cohort is beginning to find its footing again.

The expanded First Home Buyer Guarantee Scheme at the Federal level, alongside changes to stamp duty thresholds in Western Australia, will further help more young people take their first steps into home ownership.

These are smart, targeted measures that address affordability at the entry point.

The construction pipeline

Despite positive initiatives by government and the industry working hard to deliver the much needed housing, the forward supply pipeline remains constrained.

According to the UDI, the number of lots under construction and expected to be delivered within the next 12 months is down by 5.1 per cent compared to this time last year.

This dip, while not dramatic, highlights the need to focus on continuing to activate supply pipelines more quickly and efficiently.

Positive policy momentum

UDIA continues to advocate for more action in relation to addressing approval timelines, removing unnecessary red tape, and making timely investments in infrastructure that supports new communities.

Encouragingly, the commitment from state and federal governments to improve housing supply is clearer than ever.

During the recent election cycle, strong bipartisan support emerged for initiatives that focus on unlocking land, improving planning frameworks, and delivering more housing across all segments—from social and affordable housing to private market development.

Prime Minister Anthony Albanese has reaffirmed housing as a top national priority, and this commitment is already being reflected in programs like the Housing Australia Future Fund and the National Housing Accord.

Continuing to focus on how the aspirational housing targets will be delivered under the Accord, will be key to delivering the housing we need.  The groundwork has been laid, now is the time to build on that momentum.

As an industry, we stand ready to do our part.

Developers, planners, builders, and consultants are working harder than ever to bring projects to life. The shared commitment to solving WA’s housing challenge is evident—and growing. Our role at UDIA WA is to ensure those efforts are supported by clear policies, efficient processes, and a consistent pipeline of investment.

As we move through 2025, UDIA WA will continue to work with all levels of government to ensure the delivery of housing keeps pace with the needs of our growing population.

We’ll keep advocating for reforms that streamline development, facilitate development ready land, and make it easier for people to find—and afford—a place to call home.