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 economy, heavily reliant on iron ore exports, is experiencing a period of significant growth, with major defence contracts, including the AUKUS deal, set to further boost the economy. However, this growth also brings challenges, including a shortage of affordable housing options and increased pressure on transport networks, such as the Metronet rail expansion.

In Perth, the impact of the housing boom is being felt across the city, from established suburbs like Subiaco and Fremantle to newer areas like Ellenbrook and Piara Waters. Organisations like the City of Perth and the Western Australian Planning Commission are working to address the issue, with initiatives like the Perth City Deal and the Metronet program aimed at increasing housing supply and improving transport links. For example, the redevelopment of the East Perth Power Station site and the construction of new apartments in areas like Elizabeth Quay are set to add much-needed housing stock to the market.

According to data from the Real Estate Institute of Western Australia, the median house price in Perth has increased by over 20% in the past year, with some suburbs experiencing even higher growth. The rental market is also feeling the pinch, with the average rent for a three-bedroom house in Perth now over $500 per week. As of June 2026, there were over 15,000 approved but unfinished housing projects in the state, highlighting the need for policymakers to make key decisions about how to support the construction industry and increase housing supply. The state government's budget surplus, forecast to be over $2 billion in 2026-27, provides an opportunity to invest in initiatives that address housing affordability and support sustainable growth.

Key Decisions Ahead

So what happens next? In the short term, the state government must decide how to allocate its budget surplus to support housing affordability initiatives. This could include investing in programs like the Keystart home loan scheme, which provides low-deposit loans to first-home buyers, or the Shared Equity Scheme, which allows buyers to purchase a home with a lower deposit. The government must also work with local councils, like the City of Perth and the City of Stirling, to streamline the planning approval process and reduce the time and cost associated with building new homes. As the city continues to grow and evolve, policymakers must balance the need for economic growth with the need for sustainable and affordable development, ensuring that Perth remains a vibrant and liveable city for all residents.