For much of the past decade, Perth’s property market quietly sat in the shadow of Australia’s eastern capitals. While Sydney and Melbourne experienced extraordinary price growth, Perth spent years recovering from the end of the mining boom. Housing construction slowed, investor activity weakened, and many developers postponed projects due to uncertain demand. Fast forward to today, and the situation has completely reversed. Perth has emerged as one of Australia’s strongest-performing property markets. Population growth has accelerated, interstate migration has surged, employment conditions remain robust, and affordability relative to other capital cities has attracted thousands of new residents. Yet this success has created a new challenge: there simply are not enough homes available to meet demand.

This imbalance between supply and demand has become one of the defining economic issues facing Western Australia. It has pushed housing affordability to the forefront of government policy discussions and ultimately laid the foundation for the State Government’s landmark $2 billion housing investment package. Rather than being a short-term stimulus measure, the initiative represents a strategic response to long-term structural pressures that have been building across the housing market for several years.

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The Housing Shortage That Has Been Years in the Making

1. Housing shortages do not emerge overnight. They are typically the result of multiple factors working together over an extended period. Western Australia entered the current housing cycle with a relatively low pipeline of new residential construction. Following the mining downturn between 2014 and 2019, housing approvals declined significantly as developers responded to weaker demand and softer market conditions. When population growth accelerated after the pandemic, the housing sector was caught off guard. Demand recovered much faster than supply.

• Construction companies faced labour shortages.
• Building material costs surged.
• Approval processes became increasingly stretched.

2. Skilled trades became harder to secure. At the same time, migration numbers continued rising. The result was predictable. More people were competing for fewer homes. According to ABS population estimates, Western Australia recorded some of the strongest population growth rates in the nation throughout 2023 and 2024. Overseas migration became a major contributor to growth, while interstate migration increasingly favoured Perth due to its relative affordability and employment opportunities. Every new resident requires housing. Whether renting or buying, the increased population placed immediate pressure on available stock.

3. Perhaps the clearest indicator of the housing imbalance has been Perth’s rental vacancy rate. Historically, a balanced rental market typically has a vacancy rate between 2.5% and 3.5%. Perth has been operating well below these levels.

• Vacancy rates have frequently hovered around or below 1%, creating one of the tightest rental markets in Australia.
• For tenants, this has translated into fierce competition, rising weekly rents, and reduced housing choice. 
• For prospective first-home buyers, the situation has created a double-edged sword.

On the one hand, rising rents have encouraged many households to consider homeownership earlier than planned. On the other hand, escalating property prices and increased competition have made entering the market increasingly difficult. The pressure has been particularly evident across Perth’s middle-ring suburbs, where many first-home buyers traditionally begin their property journey.

4. Areas such as Baldivis, Ellenbrook, Byford, Alkimos, Yanchep, Dayton, Brabham and Wellard have experienced significant demand growth as buyers search for affordable alternatives closer to infrastructure and employment hubs. One of the most important housing metrics monitored by economists is the relationship between population growth and dwelling completions. When population growth consistently outpaces 

• Housing delivery
• Shortages emerge

This is precisely what has occurred across WA. The challenge is not simply about building more homes. It is about building homes quickly enough to keep pace with population expansion.

5. The State Government’s analysis suggests WA requires tens of thousands of additional dwellings over the coming years simply to restore balance between housing supply and demand. Without intervention, affordability pressures would likely intensify. This is particularly concerning for first-home buyers, who often have less equity, smaller deposits, and a limited ability to compete with established homeowners or investors. The decision to direct significant portions of the housing investment package towards first-home buyers is not accidental. Home ownership remains one of the most effective pathways to long-term wealth creation in Australia. However, first-home buyers are often the most vulnerable participants in a rapidly rising market.

• When prices accelerate faster than wages, deposit requirements increase.
• When rental costs rise, saving becomes more difficult.
• When housing supply is constrained, competition intensifies.

These challenges can create barriers that delay home ownership for years.

6. The WA Government’s housing strategy seeks to address these issues by increasing housing supply specifically targeted towards entry-level buyers. The proposed delivery of approximately 11,000 new homes aims to expand opportunities for households that may otherwise struggle to enter the market. Rather than relying solely on demand-side incentives, policymakers are increasingly recognising that supply-side solutions are essential for long-term affordability. Ironically, Perth’s affordability has contributed significantly to the current housing pressures. Compared with Sydney, Melbourne and Brisbane, Perth remains one of Australia’s most affordable capital city housing markets.

7. For interstate migrants, this affordability gap is highly attractive. Many households relocating from Sydney can sell an established home and purchase a larger property in Perth while still retaining substantial equity. This affordability differential has become one of Perth’s greatest strengths. However, it has also increased competition for housing. 

• As migration continues, demand for homes remains elevated. 
• Without substantial increases in housing supply, affordability advantages can quickly erode. 

This is one of the key reasons policymakers have moved aggressively to support residential development and housing construction. Beyond housing affordability, the $2 billion investment carries broader economic implications.

8. Residential construction is a major contributor to economic activity. New housing projects generate employment across:

• Construction
• Engineering
• Manufacturing
• Transport
• Retail and Professional services sectors

Each new dwelling creates a ripple effect throughout the economy. The delivery of approximately 11,000 homes, therefore, represents more than just additional housing stock. It represents infrastructure investment, job creation, economic diversification and long-term community development. For Perth’s growth corridors, the benefits could extend well beyond property markets. Improved infrastructure, enhanced transport connectivity and expanded residential communities may help support future economic growth across the metropolitan region.

9. The announcement of Western Australia’s $2 billion housing investment may ultimately be remembered as one of the most significant housing policy interventions in the state’s modern history. The initiative acknowledges a reality that industry experts, developers and housing economists have been highlighting for several years: supply must increase if affordability is to be preserved. For first-home buyers, the programme offers the prospect of greater housing choice and improved access to home ownership.

• For developers, it provides greater certainty around future housing delivery.
• For investors, it signals continued population-driven demand.

And for Perth’s broader property market, it represents an attempt to strike a balance between growth and affordability amid unprecedented demand.

Breaking Down the $2 Billion Housing Investment: Where the Money Is Going and How 11,000 Homes Will Be Delivered.

1. When governments announce billion-dollar housing packages, the headline figure often captures public attention. Yet the real story lies beneath the headline. The effectiveness of any housing initiative depends not on the size of the funding alone, but on how the money is allocated, where the homes are built, and whether the investment addresses the underlying causes of supply shortages. In WA, the $2 billion housing investment is significant not merely because of its scale, but because it represents one of the most ambitious attempts in recent years to tackle housing supply constraints through a combination of land development, infrastructure investment, housing construction and first-home buyer support.

2. The programme aims to deliver approximately 11,000 new homes across WA, with a strong focus on improving housing accessibility for first-home buyers. But the initiative is about far more than simply increasing the number of dwellings. It is designed to unlock new housing corridors, accelerate residential developments, improve essential infrastructure and create the conditions necessary for long-term housing growth. For Perth’s property market, this investment could prove to be a defining moment in shaping the city’s housing landscape over the next decade.

3. According to industry forecasts, Australia faces a substantial shortfall between housing demand and dwelling completions. Population growth has accelerated rapidly while construction activity has struggled to keep pace. WA has not been immune to these challenges. In fact, Perth’s strong population growth, tight rental market and limited housing supply have created conditions that many economists describe as a perfect storm. The state’s response has been to adopt a long-term approach rather than relying solely on temporary incentives.

4. The $2 billion commitment is intended to support housing delivery across multiple fronts simultaneously. Rather than focusing exclusively on construction, the programme seeks to remove barriers that have historically delayed housing supply. These barriers include infrastructure bottlenecks, land shortages, development delays and construction capacity constraints. A common misconception is that housing shortages can be solved simply by releasing more land. In reality, residential development requires extensive supporting infrastructure before homes can be built. Roads, water services, sewerage networks, power supply, schools, public transport and community facilities must all be planned and delivered. 

5. Suburbs such as Alkimos, Eglinton, Yanchep, Byford, Wellard and Baldivis have experienced strong population growth over recent years. Even so, ongoing infrastructure investment remains essential if these areas are to accommodate thousands of additional residents. By investing in supporting infrastructure, the government aims to unlock future housing capacity that might otherwise remain inaccessible. When land availability becomes constrained, prices inevitably rise as buyers compete for limited opportunities. This trend has been visible across many Perth suburbs where demand for house-and-land packages has remained exceptionally strong. 

6. By bringing additional land to market more efficiently, policymakers hope to increase housing choice while moderating future price growth. For first-home buyers, this could create greater access to affordable housing options across emerging suburban communities. Historically, some of Perth’s strongest-performing growth suburbs have been those supported by coordinated land releases and infrastructure investment. Over the past two decades, substantial investment in roads, schools, retail facilities and transport infrastructure transformed Ellenbrook from a developing community into one of Perth’s largest residential hubs. 

7. Demand-side incentives alone can sometimes contribute to price growth by increasing purchasing power without increasing available housing stock. By creating more homes, governments can increase competition among sellers rather than among buyers. The planned delivery of approximately 11,000 homes represents a meaningful contribution towards improving housing availability. For first-home buyers, increased supply can create several benefits. More housing stock typically provides greater choice, reduces competition pressure and helps stabilise price growth over the medium term. While no single programme can completely resolve affordability challenges, increasing housing supply remains one of the most effective long-term strategies available.

8. According to housing industry estimates, residential construction has one of the highest economic multiplier effects within the Australian economy. Each dwelling built creates employment opportunities both directly and indirectly. The delivery of 11,000 homes, therefore, represents a substantial economic stimulus alongside its housing objectives. For WA, this is particularly important as the state continues to diversify its economy beyond traditional resource sectors. Housing construction provides a pathway for sustainable employment growth while supporting population expansion.

9. Housing supply increases generally help moderate price growth rather than trigger significant price declines. Population growth remains strong, vacancy rates remain tight, and migration continues to support demand. Under these conditions, additional housing supply is more likely to relieve pressure than reverse market growth entirely. Many economists expect Perth’s property market to remain fundamentally supported by strong demographic trends throughout the second half of the decade. The additional housing supply may contribute to a healthier, more balanced market, helping to prevent excessive price escalation while maintaining sustainable growth.

Market Factor	Current Trend	Potential Impact of 11,000 New Homes
Housing Supply	Constrained	Significant improvement
Rental Vacancy Rates	Extremely Low	Gradual stabilisation
First Home Buyer Access	Challenging	Increased opportunities
Land Availability	Tight	Expanded supply
Infrastructure Capacity	Under Pressure	Enhanced support
Construction Activity	High Demand	Sustained growth
Property Price Growth	Strong	More balanced growth
Community Development	Expanding	Accelerated delivery

Let’s Analyse ABS Data, CoreLogic Trends, Vacancy Rates, Building Approvals and the True Scale of the Supply Gap

1. In Perth’s current market, however, the dominant force shaping prices, rents and buyer behaviour is simple: there are not enough homes for the number of people who want to live here. That supply shortage is the central issue behind the market’s current conditions. While headlines often focus on rising property values or competitive auctions, the real issue lies deeper within the numbers. The statistics emerging from the Australian Bureau of Statistics (ABS), CoreLogic, REIWA, the Housing Industry Association (HIA) and major banks all point towards the same conclusion. 

2. Every additional resident requires accommodation, whether they rent, buy, share housing or move into existing family homes. When population growth accelerates, and housing construction fails to keep pace, pressure inevitably builds across the market. Western Australia has become one of Australia’s fastest-growing states. According to ABS population estimates, WA’s population growth has consistently outperformed the national average over recent years. Strong employment opportunities, major resource projects, interstate migration and overseas migration have all contributed to this trend. 

Year	Estimated Population Growth
2020	0.7%
2021	0.9%
2022	1.8%
2023	3.1%
2024	2.8%
2025 Forecast	2.5%+

3. Perhaps no statistic highlights Perth’s housing shortage more clearly than the rental vacancy rate. Vacancy rates measure the proportion of rental properties available at any given time. In a balanced market, vacancy rates generally range from 2.5% to 3.5%.

• When vacancy rates fall below 2%, competition among tenants intensifies.
• When they fall below 1%, the market enters extremely tight territory.

Perth has spent a prolonged period operating below this threshold. In practical terms, a vacancy rate below 1% means prospective tenants often compete against dozens of applicants for a single property.

• Property managers report record enquiry volumes.
• Rental inspections attract large crowds.
• Lease agreements are frequently secured within days of being advertised.

Many households that would normally rent are increasingly considering purchasing a property simply because rental options are becoming harder to secure. As a result, this creates additional demand in the owner-occupier market.

Vacancy Rate	Market Condition
Above 3%	Oversupply
2% – 3%	Balanced
1% – 2%	Tight
Below 1%	Severe Shortage

4. CoreLogic’s housing market data has consistently ranked Perth among Australia’s strongest-performing capital cities. After years of relatively subdued growth following the mining downturn, Perth has re-emerged as one of the country’s most resilient housing markets. That recovery has been driven by several factors.

• Affordability compared with Sydney and Melbourne remains attractive.
• Employment conditions remain strong.
• Population growth continues to support demand.
• Most importantly, supply remains constrained.
• Property prices rise when buyers outnumber sellers.

This basic economic principle has been clearly visible across Perth’s housing market. In many suburbs, listing volumes remain well below long-term averages. That means buyers often find themselves competing for limited stock.

Indicator	Historical Average	Recent Trend
Active Listings	100% Baseline	Below Average
Vacancy Rate	2.5%-3.5%	Below 1%
Days on Market	40-60 Days	Significantly Lower
Rental Demand	Moderate	Extremely High
Buyer Competition	Balanced	Elevated

5. One reason Perth has attracted so much interstate migration is affordability. Compared with Sydney and Melbourne, Perth still offers significantly lower median house prices. While Perth remains relatively affordable, this advantage is gradually narrowing. Rapid price growth over recent years has increased entry costs for first-home buyers.

• Deposit requirements have risen.
• Borrowing capacity remains constrained by interest rates.
• Competition for affordable housing stock remains intense.

Without additional supply, affordability pressures are likely to continue increasing.

City	Approximate Median House Price
Sydney	$1.4M+
Melbourne	$900K+
Brisbane	$950K+
Perth	$800K Range
Adelaide	$850K+

6. The government’s target of facilitating approximately 11,000 additional homes should therefore be viewed in context. While significant, it represents only part of the broader housing solution required over the coming years. Viewed at a suburban level, the data becomes even more compelling. Across many Perth growth corridors, buyer demand continues to exceed available supply. Suburbs such as Alkimos, Eglinton, Brabham, Ellenbrook, Dayton, Byford, Baldivis and Wellard have all experienced strong population growth alongside increasing housing demand. These locations share several common characteristics.

• They offer relative affordability.
• They provide access to transport infrastructure.
• They attract young families and first-home buyers.
• They continue to benefit from ongoing community investment.

As housing shortages persist, these suburbs may become increasingly important in accommodating Perth’s future growth.

7. The $2 billion housing investment is not simply a stimulus package. It is a direct attempt to address a supply imbalance that has been building for years.

• For first-home buyers, this could create new opportunities through increased housing availability.
• For investors, it reinforces the long-term demand fundamentals supporting Perth’s market.
• For developers, it signals a sustained commitment to housing growth.

And for Perth itself, it marks the beginning of a new chapter in the city’s evolution—one where housing supply will remain one of the most important factors shaping property market performance throughout the remainder of the decade.

8. Western Australia’s universities continue attracting students from Asia, Europe, Africa and the Middle East. International students typically increase demand for:

• Inner-city apartments
• Shared accommodation
• Purpose-built student housing
• Affordable rental properties

As student numbers recover, housing demand increases accordingly. Although student housing represents a specialised segment, its influence extends throughout the broader rental market. When student accommodation becomes scarce, demand spills into traditional residential housing. 

9. Population growth alone does not determine housing demand. Household formation is equally important. As young adults move out of family homes, couples form households and families expand, increasing the number of dwellings required. Australia is experiencing significant changes in household composition. Smaller household sizes mean more homes are needed to accommodate the same population. For example:

Household Type	Typical Occupancy
Family Household	3–5 People
Couple Household	2 People
Single Occupancy	1 Person
Shared Housing	2–4 People

As single-person and couple-only households become more common, housing demand rises even if population growth remains stable. This trend is often overlooked but plays a major role in long-term housing requirements.

10. Population growth rarely occurs evenly across a city. Instead, growth tends to concentrate in specific corridors where infrastructure, affordability and employment opportunities intersect. In Perth, several regions are emerging as major growth centres.

A. Northern Corridor

Continue attracting young families seeking affordable housing options. The extension of rail infrastructure through METRONET has significantly improved accessibility. Suburbs including:

• Alkimos
• Eglinton
• Yanchep
• Two Rocks

These suburbs are likely to absorb substantial future population growth.

B. North-Eastern Growth Areas

Improved transport links and ongoing residential development continue to support growth. Locations such as:

• Ellenbrook
• Brabham
• Dayton
• Henley Brook

These have experienced strong buyer demand.

C. South-Eastern Corridor

Areas including:

• Byford
• Armadale
• Hilbert
• Brookdale

They are benefiting from infrastructure investment and an increase in housing supply.

D. Southern Growth Corridor

Suburbs such as:

• Baldivis
• Wellard
• Karnup
• Mandogalup

remain attractive due to affordability and family-friendly communities. These regions are expected to play a crucial role in accommodating future residents.

11. While exact figures will vary depending on migration settings and economic conditions, the broader trend remains clear. Perth is expected to continue growing. The implications for housing are significant. Hundreds of thousands of additional residents will require accommodation. Even conservative forecasts suggest tens of thousands of additional dwellings will be required. Long-term projections indicate that Perth’s population could grow substantially over the next decade.

Year	Estimated Perth Population
2025	2.3 Million
2030	2.6 Million
2035	2.9 Million+

12. Although Perth’s housing demand remains strong, higher interest rates have introduced additional challenges for developers and builders. Development projects often rely heavily on finance. When borrowing costs increase, project feasibility can be affected. Developers must account for:

• Land acquisition costs
• Infrastructure expenses
• Construction finance
• Holding costs
• Sales and marketing expenses

Even modest increases in interest rates can significantly alter project economics. While many developers continue progressing projects, financing conditions remain more challenging than they were during the low-rate environment of 2020 and 2021.

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Perth’s Next Growth Hotspots: The Suburbs Most Likely to Benefit from WA’s $2 Billion Housing Investment

1. While national trends, interest rates and economic conditions influence buyer sentiment, the strongest long-term growth is often driven by something much closer to home: infrastructure, population growth and housing investment. Over the past twenty years, some of Perth’s highest-performing suburbs have been those that benefited from major government investment, transport improvements, employment growth and large-scale residential development. Areas that were once considered fringe locations gradually evolved into thriving residential communities as roads, schools, shopping centres and transport networks expanded.

2. The WA Government’s $2 billion housing investment has the potential to accelerate this process across multiple parts of Perth. While the programme aims to deliver approximately 11,000 homes across the state, not every suburb will benefit equally. Some locations are strategically positioned to capture a disproportionate share of future housing demand due to their existing infrastructure, available land supply and population growth potential. For first-home buyers, investors and owner-occupiers, identifying these areas early could prove critical over the coming decade. History consistently demonstrates that housing investment and infrastructure spending often create opportunities before they become obvious to the broader market.

3. As the population increases, development naturally extends into areas capable of accommodating new residents. These locations typically share several characteristics:

• Availability of developable land
• Government infrastructure investment
• Transport connectivity
• Employment accessibility
• Relative affordability
• Community facilities and services

Perth’s future growth is expected to concentrate within several key corridors. The northern, north-eastern, south-eastern and southern regions of the metropolitan area are likely to absorb much of the city’s future population growth. 

A. The Northern Coastal Corridor: Perth’s Long-Term Expansion Zone

The northern coastal corridor remains one of Perth’s most important growth regions. Population growth, infrastructure investment and strong buyer demand continue to reshape this part of the metropolitan area.

1. Alkimos

• Alkimos has emerged as one of Perth’s most closely watched growth suburbs. Located approximately 40 kilometres north of the CBD, the suburb offers a combination of coastal lifestyle, affordability and expanding infrastructure. 
• Alkimos continues attracting young families seeking modern housing options without the price tag associated with established coastal suburbs. 
• The area’s master-planned development model also supports long-term community growth. 

As additional housing investment flows into Perth’s northern corridor, Alkimos is likely to remain a major beneficiary. Several factors support its long-term outlook:

Growth Driver	Impact
Coastal Location	High
Population Growth	High
Land Availability	High
Infrastructure Investment	High
First-Home Buyer Demand	Very High

2. Eglinton

• Located immediately north of Alkimos, Eglinton represents one of Perth’s fastest-growing residential markets.
• The suburb has benefited significantly from transport infrastructure improvements and ongoing residential development.
• For many first-home buyers, Eglinton offers an opportunity to secure a modern home in a growing coastal community at a price point often unavailable in Perth’s established beachside suburbs.
• As government housing initiatives encourage additional residential supply, Eglinton’s growth trajectory appears well supported.

3. Yanchep

Once considered a distant outer suburb, Yanchep is rapidly transforming into a major urban centre. The extension of rail infrastructure has fundamentally changed perceptions of the area.

• Transport accessibility is one of the strongest catalysts for property demand.
• As commuting becomes easier, previously overlooked locations become increasingly attractive.

Yanchep’s combination of affordability, land availability and infrastructure investment positions it as one of Perth’s most important long-term growth markets.

Suburb	Growth Potential	First Home Buyer Appeal
Alkimos	Very High	Very High
Eglinton	Very High	High
Yanchep	High	High
Two Rocks	Emerging	Moderate

4. Ellenbrook: A Growth Story Decades in the Making

Few Perth suburbs better demonstrate the relationship between infrastructure and property growth than Ellenbrook.  Over the past two decades, Ellenbrook has evolved from a developing residential estate into one of Perth’s largest suburban communities. 

• The suburb now benefits from:

1. Established schools
2. Retail centres
3. Community facilities
4. Expanding employment opportunities
5. Improved transport connectivity

• For buyers who previously viewed commuting as a challenge, improved transport infrastructure has altered the equation. 
• As population growth continues pushing north-east, Ellenbrook remains well-positioned to benefit from future housing investment.

5. Brabham: The Infrastructure Sweet Spot

• Brabham has become one of Perth’s standout growth suburbs in recent years. Strategically located between Ellenbrook and Perth Airport, the suburb offers strong connectivity while remaining relatively affordable. 

• For first-home buyers, it represents an opportunity to enter a suburb still undergoing significant transformation.
• Access to transport networks, employment hubs and essential services has become a key factor influencing purchasing decisions. Brabham’s proximity to:

1. Airport infrastructure
2. Industrial employment hubs
3. Major road networks
4. METRONET connections

6. Dayton: Quietly Emerging as a Future Growth Leader

• As housing affordability pressures increase across Perth, locations such as Dayton are becoming increasingly attractive to families seeking value without sacrificing accessibility.
• Dayton often receives less attention than neighbouring suburbs, yet its growth fundamentals remain compelling. The suburb benefits from:

1. Strong population growth
2. New housing developments
3. Infrastructure upgrades
4. Proximity to employment centres

7. Byford: The South-East Growth Engine

• Few suburbs illustrate Perth’s southern expansion more clearly than Byford. Historically regarded as a semi-rural community, Byford has experienced substantial residential growth over recent years. 
• As infrastructure investment continues, Byford is expected to remain one of Perth’s fastest-growing residential centres. Several factors continue to support demand:

1. Relative affordability
2. Family-oriented communities
3. Infrastructure investment
4. Future transport improvements
5. Expanding retail and commercial services

• The suburb increasingly attracts upgraders seeking larger properties and improved lifestyle opportunities. 

8. Armadale’s Transformation Story

• Armadale has long occupied an important position within Perth’s south-eastern corridor.
• Historically viewed as an affordable housing market, the suburb is increasingly benefiting from urban renewal and infrastructure investment.
• Improved transport, community facilities and residential development have the potential to reshape buyer perceptions over the coming decade.
• As affordability becomes increasingly important, suburbs such as Armadale may experience renewed demand from first-home buyers priced out of other parts of Perth.

B. The Southern Corridor Continues to Expand

Perth’s southern suburbs remain among the city’s most active housing markets. Population growth, transport infrastructure, and employment accessibility continue to support demand.

1. Baldivis

• Baldivis has become one of Perth’s most established growth suburbs. Its appeal stems from a combination of affordability, family-friendly amenities and housing choice. 
• Baldivis remains particularly attractive to young families entering the market. As housing demand continues expanding southward, the suburb is expected to maintain strong growth fundamentals. The suburb offers:

1. Large residential communities
2. Modern housing stock
3. Schools and shopping facilities
4. Access to transport networks

2. Wellard

• Wellard’s proximity to rail infrastructure has been a major driver of demand. The suburb strikes a balance between affordability and connectivity that strongly appeals to first-home buyers. 
• Transport-oriented communities often outperform expectations because accessibility remains one of the most valuable housing attributes. Wellard’s growth story reflects this reality.

Suburb	Population Growth	Infrastructure Score	Housing Demand
Baldivis	High	High	High
Wellard	High	High	High
Karnup	Emerging	Moderate	Growing
Mandogalup	Emerging	Moderate	Growing

Will WA’s $2 Billion Housing Plan Actually Improve Affordability?

1. For many Western Australians, home ownership has traditionally been viewed as a major life milestone. It represents stability, financial security and an opportunity to build long-term wealth. Yet over the past few years, that dream has become increasingly difficult to achieve for many first-home buyers. Rising property prices, higher interest rates, increasing rents and limited housing supply have combined to create one of the most challenging purchasing environments seen in Perth for more than a decade. The WA Government’s $2 billion housing investment has been positioned as a significant step towards improving housing accessibility and helping more Western Australians enter the property market.

2. The promise of delivering approximately 11,000 new homes has generated considerable optimism among aspiring buyers. The housing package has the potential to create meaningful opportunities for first-home buyers, but its success will ultimately depend on how effectively supply can be increased and whether affordability improvements can keep pace with ongoing population growth. Previous generations often entered the market after saving a relatively modest deposit. Today, first-home buyers face a very different landscape.

• House prices have increased substantially.
• Construction costs have risen.
• Interest rates are significantly higher than they were during the pandemic period.
• Living expenses continue to place pressure on household budgets.

At the same time, rental costs have increased sharply, making it harder for prospective buyers to save. The challenge is accumulating a deposit while simultaneously paying rising rents and managing everyday living costs.

3. While housing affordability is often discussed in terms of property prices, the deposit requirement remains one of the largest obstacles facing first-home buyers. For many first-home buyers, particularly young families, saving these amounts while renting can take several years. The challenge becomes even greater when property values continue rising faster than savings can accumulate. This is why increasing housing supply remains so important. More supply can help moderate price growth and reduce the rate at which affordability deteriorates. Consider a simplified example:

Property Value	5% Deposit	10% Deposit	20 % Deposit
$550,000	$27,500	$55,000	$110,000
$650,000	$32,500	$65,000	$130,000
$750,000	$37,500	$75,000	$150,000
$850,000	$42,500	$85,000	$170,000

4. Despite recent price growth, Perth remains one of Australia’s more affordable capital cities.  As population growth continues and housing demand remains strong, Perth’s affordability advantage could gradually narrow. This relative affordability is one reason Perth continues attracting interstate migrants.

• For local buyers, this affordability advantage remains valuable.
• For interstate buyers, it often appears even more attractive.

However, affordability is a moving target. The government’s housing investment is partly designed to prevent this outcome by expanding housing supply before shortages become even more severe.

Capital City	Median House Price (Approx.)
Sydney	$1.4M+
Melbourne	$900K+
Brisbane	$950K+
Adelaide	$850K+
Perth	$800K Range

5. Many economists expect interest rate conditions to gradually improve over the coming years. Should borrowing costs ease, buyer confidence may strengthen further. This could support housing demand but may also place renewed upward pressure on prices. Although Perth remains relatively affordable compared with eastern capitals, interest rates continue to affect how much buyers can borrow.

Interest Rate Environment	Borrowing Capacity Trend
Low Interest Rates	Higher Borrowing Capacity
Rising Interest Rates	Reduced Borrowing Capacity
Stable Rates	Improved Confidence
Falling Rates	Increased Market Activity

6. Consider a hypothetical young couple working in Perth. Together they earn a combined household income of $130,000 annually. They currently rent a property in Baldivis and have been saving for a home deposit. Three years ago, many of the homes they were considering were priced below $500,000. Today, similar properties may command significantly higher values. At the same time:

• Rental costs have increased.
• Living expenses have risen.
• Interest rates remain elevated.

For this couple, additional housing supply could make a meaningful difference. New developments in areas such as Eglinton, Alkimos, Byford or Brabham may provide opportunities to enter the market at a more accessible price point. This example reflects the experience of thousands of aspiring buyers across Perth.

7. While the housing package will influence the broader market, first-home buyers are likely to be among the biggest beneficiaries. The cumulative effect of these factors may improve market accessibility over time. Several factors support this view: 

• Housing supply takes time to deliver.
• Infrastructure takes time to build.
• Communities take time to develop.
• Patience will therefore be required.

Importantly, the benefits are likely to emerge gradually rather than immediately.

Benefit Area	Potential Impact
Increased Housing Supply	High
More Land Availability	High
Improved Housing Choice	High
Better Infrastructure	Moderate to High
Reduced Supply Pressure	Long-Term Benefit
Affordability Support	Moderate

Interest Rates, Major Bank Forecasts and Borrowing Power: What the Next Five Years Could Mean for Perth Property Buyers

1. Few factors affect housing demand more directly than the cost of borrowing. When interest rates fall, borrowing capacity generally increases, buyer confidence improves and property market activity often accelerates. Conversely, when rates rise, affordability becomes more challenging, borrowing power declines and buyers become more cautious. Over the past several years, Australian property markets have experienced both extremes. The record-low interest rates of 2020 and 2021 created one of the strongest housing booms in modern history. Buyers suddenly gained access to significantly greater borrowing capacity, which fuelled demand across capital cities and regional markets alike. 

2. This period was followed by one of the most aggressive monetary tightening cycles in decades as the Reserve Bank of Australia (RBA) sought to combat inflation. For Perth buyers, investors and first-home buyers, understanding where interest rates may head next is crucial because the future direction of borrowing costs could play a major role in shaping housing demand, affordability and property values throughout the remainder of the decade. Unlike Sydney and Melbourne, where affordability pressures are already extreme, Perth continues benefiting from relative affordability and strong population growth.

3. Most property buyers rely on finance. Even relatively small changes in mortgage rates can significantly influence purchasing power. When rates rise, monthly repayments increase and lenders assess borrowers more conservatively. As a result, buyers may need to reduce their budget or contribute a larger deposit.

• When rates fall, the opposite occurs.
• Borrowing power improves, allowing buyers to access higher-priced properties.

This relationship explains why interest rates remain one of the most closely watched indicators in the housing market. Consider a simplified example.

Mortgage Rate	Approximate Borrowing Capacity Trend
3.0%	Very High
4.0%	High
5.0%	Moderate
6.0%	Reduced
7.0%	Significantly Reduced

4. During periods of elevated inflation, higher interest rates are often used to slow spending and reduce inflationary pressure. However, maintaining rates at restrictive levels for too long can weaken economic activity and place pressure on households. By 2026, many economists expect inflation to gradually move closer to the RBA’s target range. As inflation moderates, attention increasingly shifts towards the possibility of a more accommodative interest rate environment. While future decisions remain data dependent, the broader market consensus suggests that the most aggressive phase of monetary tightening may already be behind us.

5. Australia’s major banks closely monitor economic conditions and regularly publish forecasts regarding interest rates and housing markets. Although forecasts naturally evolve as economic conditions change, several common themes have emerged. Most major banks anticipate:

• Inflation gradually easing.
• Interest rate stability is improving.
• Consumer confidence is recovering.
• Housing demand remains relatively resilient.

Importantly for Perth, many bank economists continue highlighting the city’s strong underlying fundamentals. These factors suggest Perth may continue outperforming many other markets regardless of modest interest rate fluctuations.

Market Driver	Outlook
Population Growth	Strong
Employment Conditions	Positive
Migration	High
Housing Supply	Constrained
Affordability Relative to Sydney	Attractive
Infrastructure Investment	Significant

6. For first-home buyers, this matters enormously. Many buyers are currently constrained not by deposit availability but by lending assessments. Even households with stable incomes may find borrowing limits lower than expected due to higher mortgage serviceability requirements. If interest rates gradually ease over coming years, borrowing capacity could improve. This increased borrowing power could create renewed demand across Perth’s housing market. However, it may also reinforce competition if housing supply does not increase sufficiently.

Household Income	Current Capacity	Potential Future Capacity (Lower Rates)
$100,000	Moderate	Higher
$130,000	Moderate to High	Higher
$160,000	High	Very High

7. Affordability is influenced by more than interest rates alone. The relationship between income growth, property values and borrowing costs ultimately determines market accessibility. The WA Government’s housing investment programme aims to address one of the most important variables in this equation: housing supply. If additional supply successfully moderates price growth, affordability outcomes may improve even if borrowing costs remain relatively elevated.

Factor	Influence on Buyers
Interest Rates	High
Property Prices	High
Wage Growth	Moderate to High
Deposit Requirements	High
Rental Costs	Moderate
Housing Supply	High

8. Perth’s affordability advantage creates an important distinction. In Sydney, small changes in interest rates can have a dramatic impact because housing prices are already exceptionally high. Perth’s lower entry price points provide greater resilience. Because Perth starts from a lower price base, many buyers remain active even when borrowing conditions become more restrictive. This affordability buffer has helped support demand throughout recent market cycles. For example:

City	Median House Price
Sydney	$1.4M+
Melbourne	$900K+
Brisbane	$950K+
Adelaide	$850K+
Perth	Around $800K

Property markets rarely follow a straight line. Instead, they respond to changing economic conditions. The following scenarios illustrate how Perth could evolve over the next five years.

A. Scenario 1: Base Case

• Moderate population growth
• Stable interest rates
• Gradual housing delivery
• Continued demand

Outcome: Steady property value growth with improving market balance.

B. Scenario 2: Optimistic Scenario

• Strong migration
• Lower interest rates
• Faster infrastructure delivery
• Robust employment growth

Outcome: Above-average demand and stronger property market performance.

C. Scenario 3: Conservative Scenario

• Slower economic growth
• Delayed housing projects
• Persistent affordability challenges

Outcome: Moderate growth but continued housing shortages. Across all three scenarios, population growth remains a central driver.

9. Many analysts continue highlighting Perth as one of Australia’s strongest long-term housing markets. Several structural advantages support this view. The city benefits from:

• Ongoing economic growth.
• Strong migration trends.
• Large infrastructure investment programmes.
• Relative affordability.
• Housing supply constraints.

These factors are difficult to ignore. While short-term market conditions may fluctuate, the longer-term outlook remains supported by strong demographic fundamentals.

Explore: Best Suburbs in Perth for Families in 2026

The Challenges Ahead: What Could Prevent WA’s 11,000-Home Vision from Becoming Reality?

Over the past two decades, federal and state governments have announced numerous housing initiatives to improve affordability, increase supply and support growing populations. Some have achieved meaningful outcomes, while others have fallen short due to practical delivery challenges. This is why the success of Western Australia’s $2 billion housing investment cannot be measured by funding alone. Delivering approximately 11,000 homes across a rapidly growing state is a significant undertaking. It requires coordination between government agencies, developers, builders, infrastructure providers, local councils, financiers and the construction workforce. Each component must work efficiently. If one link in the chain breaks down, housing delivery can slow considerably. While the programme has been widely welcomed by industry participants, economists and housing advocates, several challenges could affect its intended outcomes. Understanding these risks is important because they will play a major role in shaping Perth’s housing market over the coming years.

Challenge One: The Construction Labour Shortage

Perhaps the most immediate challenge facing the housing sector is workforce availability. Housing construction depends heavily on skilled trades and specialised labour. Western Australia continues to experience strong competition for these skills. The resources sector, major infrastructure projects and commercial construction all require many of the same workers. As a result, residential construction often competes for talent. Even when funding is available, projects cannot progress without sufficient labour capacity. This challenge becomes even more significant when multiple housing projects are launched simultaneously. Every home requires multiple professionals working together, including:

Occupation	Role in Housing Delivery
Carpenters	Structural Construction
Bricklayers	Building Completion
Electricians	Essential Services
Plumbers	Water Infrastructure
Roof Plumbers	Roofing Systems
Civil Contractors	Site Preparation
Engineers	Project Delivery
Surveyors	Planning and Compliance

Population growth increases demand for housing, but it also increases demand for workers across the economy. As new residents arrive, industries expand. Healthcare, education, retail, logistics and construction all require additional employees. This creates competition for labour, which in turn can constrain housing delivery. While migration can help alleviate workforce shortages over time, there is often a lag between population growth and workforce expansion. During that period, housing delivery can remain constrained.

Challenge Two: Rising Construction Costs

The housing industry continues dealing with the after-effects of one of the most inflationary periods in recent history. Construction costs increased significantly following the pandemic. Although cost growth has moderated compared with peak levels, builders and developers continue facing elevated expenses. These costs influence project feasibility because developments that appear viable on paper can become challenging if construction expenses increase unexpectedly. For large-scale housing programmes, cost management becomes critical.

Cost Category	Current Impact
Labour	High
Materials	High
Transport	Moderate
Insurance	Increasing
Finance	High
Compliance	Growing
Infrastructure	Significant

Challenge Three: Planning and Approval Delays

Housing delivery is not simply a construction issue. Before a home can be built, multiple approval stages must typically be completed. These may include:

• Land rezoning
• Environmental assessments
• Development approvals
• Building permits
• Infrastructure planning
• Utility connections

Each stage serves an important purpose. However, lengthy approval timeframes can significantly delay housing supply. Industry groups have consistently argued that streamlining planning processes could accelerate housing delivery without compromising quality or community outcomes. Governments across Australia are increasingly exploring reforms to reduce unnecessary delays. These reforms matter because they may determine how quickly the 11,000-home target can be achieved.

Challenge Four: Infrastructure Delivery Timelines

Infrastructure remains one of the most important yet overlooked components of housing supply. Homes cannot be delivered at scale without:

• Roads
• Water services
• Sewerage systems
• Power networks
• Schools
• Community facilities
• Public transport

In many growth areas, infrastructure delivery determines how quickly housing can proceed. Even where land is available, development may be delayed if supporting infrastructure has not yet been completed. This is why a significant portion of the government’s housing investment is directed towards enabling infrastructure. However, infrastructure projects themselves require planning, approvals, funding and workforce resources, so delays in these areas can have flow-on effects for housing delivery.

Challenge Five: Builder Capacity and Industry Stability

The construction sector has endured considerable pressure over recent years. Across Australia, numerous builders faced financial challenges following rapid cost increases and supply chain disruptions. Although conditions have improved, industry stability remains an important consideration. Developers and lenders increasingly focus on:

• Builder’s financial strength
• Delivery track records
• Project management capability
• Workforce availability

Large-scale housing programmes require a healthy and resilient construction sector. If builder capacity becomes constrained, project delivery timelines may extend, which can slow overall housing output.

History provides valuable insights into the challenges of housing delivery. During previous periods of strong demand, governments often increased housing targets. However, delivery frequently proved more difficult than anticipated. Common obstacles included:

• Workforce shortages
• Infrastructure bottlenecks
• Financing constraints
• Planning delays
• Escalating construction costs

These lessons are relevant today. The success of the current programme will depend on how effectively these risks are managed, and on how that management shapes the outcome.

Challenge Six: Continued Population Growth Could Outpace Supply

One of the biggest long-term risks is that demand may continue growing faster than supply. Perth’s population is expected to increase significantly over the coming years, which could keep pressure on housing even as supply expands.

• Migration remains strong.
• Employment conditions remain favourable.
• Lifestyle advantages continue attracting interstate residents.

Even if the government successfully delivers 11,000 homes, demand could continue expanding. As a result, housing shortages may persist unless supply growth becomes sustained.

Factor	Outlook
Population Growth	Strong
Migration	Elevated
Rental Demand	High
Housing Supply	Improving but Constrained
Vacancy Rates	Tight
Construction Capacity	Limited

Challenge Seven: Economic Uncertainty

Property markets do not operate in isolation. Broader economic conditions influence housing demand and construction activity. Potential risks include:

• Global economic slowdowns
• Commodity price fluctuations
• Interest rate volatility
• Inflation pressures
• Reduced consumer confidence

Western Australia has historically demonstrated strong economic resilience. However, external economic factors can still influence housing markets, so monitoring these conditions remains important.

Challenge Eight: Balancing Affordability and Growth

One of the most difficult challenges facing policymakers is balancing affordability with market stability. The objective is not to create a property market downturn. Nor is it to allow affordability to deteriorate indefinitely. Instead, policymakers seek sustainable growth, which requires:

• Adequate housing supply
• Continued economic growth
• Infrastructure investment
• Sensible planning outcomes

Achieving all of these goals simultaneously is challenging. Yet it remains essential because it supports the long-term health of the housing market.

Western Australia’s housing shortage is part of a broader national issue. Across Australia, housing demand has increased faster than supply. The Federal Government’s National Housing Accord has highlighted the need for a significant increase in housing delivery. WA’s housing programme therefore forms part of a larger effort to address structural housing shortages nationwide, and its success may ultimately provide valuable lessons for other states.

If housing supply fails to keep pace with demand, the consequences could be significant.

• Potential outcomes include:
• Continued rental shortages
• Rising housing costs
• Reduced affordability
• Labour mobility constraints
• Slower economic growth

Housing is no longer simply a property market issue. It is increasingly viewed as an issue of economic competitiveness. Cities that fail to provide adequate housing often struggle to attract and retain workers, which weakens competitiveness. This broader perspective helps explain the urgency surrounding housing policy reform.

Perth Property Market Outlook 2026–2035: Forecasting Prices, Demand, Housing Supply and Growth Opportunities Over the Next Decade

1. Property markets are often analysed through the lens of the next quarter, the next interest rate decision or the next government announcement. Yet the biggest opportunities in real estate are rarely created over months. The homeowners who purchased in Baldivis before major population growth arrived, the investors who recognised Ellenbrook’s long-term potential before the rail line was completed, and the families who secured homes in Alkimos before significant infrastructure investment all benefited from one thing: they focused on long-term trends rather than short-term noise. 

2. As Perth enters a new era of population expansion, infrastructure development and housing investment, the next decade could become one of the most transformative periods in the city’s modern history. The WA Government’s $2 billion housing initiative is only one piece of a much larger story. Population growth, migration, economic diversification, transport investment and changing buyer preferences are reshaping Perth’s future. The question facing buyers, investors and developers is not whether Perth will change. 

3. For much of the 2010s, Perth experienced a period of adjustment following the end of the mining investment boom.

• Housing demand softened.
• Population growth moderated.
• Property prices moved sideways across many areas.

This period created the perception that Perth was a slower-growth market than Sydney or Melbourne.

The Three Forces Likely to Shape Perth’s Next Decade

When forecasting property markets, numerous variables must be considered. However, three drivers stand above all others.

1. Population Growth

• People create housing demand. Without population growth, housing demand eventually stagnates. With strong population growth, housing demand tends to expand. 
• Current projections suggest Perth’s population could approach three million residents within the next decade. That growth will require substantial housing delivery.

2. Infrastructure Investment

• Infrastructure creates accessibility. Accessibility creates demand. Demand often drives long-term property value growth. 
• METRONET, road upgrades, industrial precincts and community infrastructure projects are already reshaping large parts of Perth. 

3. Housing Supply

• The relationship between supply and demand remains the foundation of property market performance. If housing supply consistently lags behind demand, prices generally rise over time. 
• The success of the government’s housing strategy will therefore play a significant role in determining market outcomes.

Year	Estimated Population
2025	2.3 Million
2027	2.45 Million
2030	2.6 Million
2032	2.75 Million
2035	2.9 Million+

4. The government’s target of supporting approximately 11,000 new homes is significant. However, when viewed against long-term population growth projections, it becomes clear that Perth’s housing challenge extends well beyond this programme. Consider a simple principle.

• If population growth remains strong for ten years, housing delivery must remain strong for the same period.
• A one-off increase in supply helps, but ongoing delivery remains essential.

This is why many economists believe housing shortages may continue to influence Perth’s market for much of the next decade.

Scenario One: Balanced Growth

This is currently considered the most likely outcome. Assumptions:

• Population growth remains strong.
• Housing supply improves gradually.
• Interest rates stabilise.
• Economic growth remains positive.

Outcome: Steady property value growth with improved market balance.

Scenario Two: Accelerated Growth

Assumptions:

• Migration exceeds expectations.
• Interest rates decline.
• Employment growth remains exceptionally strong.
• Housing delivery struggles to keep pace.

Outcome: Above-average price growth and continued housing shortages.

Scenario Three: Moderated Growth

Assumptions:

• Economic conditions soften.
• Migration slows.
• Housing delivery improves substantially.

Outcome: More modest price growth with improved affordability.

Infrastructure investment is often one of the strongest predictors of future housing demand. The impact of METRONET alone demonstrates how transport connectivity can alter buyer behaviour. Suburbs once viewed as peripheral locations become increasingly attractive as travel times improve. The next decade is likely to see continued investment across:

• Transport infrastructure
• Industrial precincts
• Logistics hubs
• Education facilities
• Healthcare infrastructure
• Community amenities

These projects will influence where future population growth occurs.

While established blue-chip suburbs will continue attracting demand, some of Perth’s strongest growth opportunities may emerge within developing corridors. These areas share common characteristics:

• Population growth capacity
• Infrastructure investment
• Housing development opportunities
• Relative affordability

Historically, these factors have supported long-term property market performance.

Region	Outlook to 2035
Alkimos–Eglinton Corridor	Very Strong
Yanchep Growth Corridor	Strong
Ellenbrook–Brabham Corridor	Very Strong
Byford Growth Area	Strong
Baldivis–Wellard Region	Strong
Armadale Transformation Zone	Improving

7. Investors are likely to remain attracted to Perth for several reasons. These conditions create an environment that many investors find attractive.

Factor	Long-Term Outlook
Rental Demand	Strong
Vacancy Rates	Tight to Balanced
Population Growth	Strong
Infrastructure Investment	Significant
Economic Growth	Positive
Housing Supply	Improving but Limited

8. Unlike Sydney, where affordability challenges have become extreme, Perth still offers entry points across multiple growth corridors. Areas benefiting from government investment and future housing supply may provide opportunities that become increasingly difficult to find in larger eastern capitals. Housing markets ultimately depend on economic activity. People need jobs before they need homes. Western Australia’s economy is becoming increasingly diversified. While resources remain important, growth is also occurring across:

• Technology
• Healthcare
• Education
• Logistics
• Defence
• Renewable energy

This diversification supports long-term population growth and housing demand.

Conclusion: Perth’s Housing Future Starts Today

Western Australia’s $2 billion housing investment marks a significant step towards addressing one of the state’s biggest challenges—meeting the growing demand for housing while improving accessibility for first-home buyers. With plans to support the delivery of approximately 11,000 new homes, the initiative reflects a long-term commitment to strengthening Perth’s housing market through increased supply, infrastructure investment and sustainable urban growth. As explored throughout this report, Perth’s property market is being shaped by strong population growth, rising migration, limited housing supply and ongoing infrastructure development. These factors have created affordability pressures but have also established Perth as one of Australia’s strongest long-term property markets. Increasing housing supply is therefore not just about building more homes; it is about supporting economic growth, improving affordability and creating well-connected communities for future generations.

While challenges such as labour shortages, construction costs and planning delays remain, the government’s investment provides an important foundation for addressing these issues over time. If delivered effectively, the programme will help ease supply constraints and create greater opportunities for buyers entering the market. At Bargoti Real Estate, we believe Perth’s future will be driven by infrastructure-led growth, expanding residential communities and strong demographic fundamentals. Emerging suburbs across the city’s growth corridors are expected to play an increasingly important role as housing demand continues to rise. For first-home buyers, investors and homeowners alike, understanding these long-term trends will be essential. Those who make informed decisions based on population growth, infrastructure investment, and future housing supply will be well-positioned to benefit from Perth’s next phase of development.

The WA Government’s housing initiative is more than a response to today’s housing shortage—it is an investment in Perth’s future. As the city continues to evolve, it offers a unique opportunity for buyers and investors to be part of one of Australia’s most promising property markets.

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