Perth's Housing Boom: What Happens Next and the Key Decisions Ahead

The Western Australian government is facing mounting pressure to address the state's housing affordability crisis, with the median house price in Perth now exceeding $650,000.

This issue matters now because the current surge in demand, driven by a strong resources economy and immigration, is putting a strain on the city's infrastructure and pricing out many would-be buyers. The state's budget surplus, announced in May, has provided some relief, but more needs to be done to address the root causes of the crisis. The Metronet rail expansion, a key infrastructure project, is expected to increase connectivity and reduce commute times, but its impact on housing affordability remains to be seen.

In Perth, the suburbs of Scarborough and Fremantle are experiencing significant growth, with new developments and infrastructure projects underway. The City of Perth's Local Planning Strategy, adopted in 2020, aims to increase density and mixed-use development in areas like the Perth City Link and the Stirling City Centre. Organisations like the Housing Authority and the Urban Development Institute of Australia (UDIA) are working together to promote affordable and sustainable housing options, including the use of modular construction and innovative financing models.

According to data from the Real Estate Institute of Western Australia (REIWA), the median rent in Perth has increased by 15% over the past 12 months, with the average rent now standing at $450 per week. The Australian Bureau of Statistics (ABS) reports that the population of Western Australia is projected to grow by 2.5% per annum between 2023 and 2028, putting further pressure on the housing market. With the state government's target of delivering 145,000 new homes by 2028, policymakers must make key decisions about zoning, density, and funding to ensure that growth is managed sustainably.

Key Decisions Ahead

Looking ahead, the state government will need to make crucial decisions about how to allocate the budget surplus to address housing affordability. This could include increasing funding for programs like the Keystart home loan scheme, which provides low-deposit loans to first-home buyers, or investing in new infrastructure projects like the proposed light rail link between Perth and Fremantle. The City of Perth's upcoming review of its Local Planning Strategy will also provide an opportunity to reassess priorities and make adjustments to ensure that growth is managed in a way that benefits all members of the community.

For now, would-be buyers and renters in Perth can take practical steps to navigate the challenging market. This includes exploring options like shared equity schemes, which allow buyers to purchase a portion of a property, or considering apartments and townhouses in areas like East Perth and Burswood, where prices may be more affordable. As the city continues to grow and evolve, it is essential that policymakers and industry leaders work together to ensure that Perth remains a vibrant and inclusive place to live, with housing options available to all.