Western Australia is currently experiencing a significant housing shortage, with a growing deficit of homes predicted to reach 25,000 by the end of 2027, primarily impacting the Perth area, where low vacancy rates and rising demand are causing a crisis in both the rental and purchase markets; this is attributed to factors like limited land supply, high construction costs, and a rapidly growing population, leading to calls for increased government intervention to build more affordable housing.
Key points about the WA housing shortage:
- Severe deficit: The Property Council of Australia estimates a potential 25,000 home deficit by 2027 in WA.
- Perth as epicentre: The most impacted area is Perth, with limited available rental properties and rising prices.
- Population growth: A large influx of people is outpacing the construction of new homes.
According to the latest data, Western Australia experienced a population growth rate of 3.1% in 2024, making it the fastest growing state in Australia, with the population reaching 2,965,159 as of June 2024.
Key points about Western Australia’s population growth in 2024:
Fastest growing state: Western Australia had the highest population growth rate among all Australian states in 2024.
Growth rate: The population growth rate for Western Australia in 2024 was 3.1%.
Population figure: As of June 2024, the population of Western Australia was 2,965,159.
Population Growth Western Australia
Building Approvals Western Australia
With more than 81,000 people moving to WA in the 2024 FY only 17,335 new dwellings were constructed.
Analysis by Economists
Perth’s property market is poised for continued growth in 2025, despite challenges such as high interest rates and increased mortgage burdens impacting other regions. Economists note a significant increase in house prices, which have risen over 20% in 2024, driven by record migration, a struggling construction sector, and sustained inflationary pressures alongside a chronic housing shortage (WAtoday).
Gavin Hegney, a Perth property analyst, predicts further growth of 10-12% in the coming year, suggesting that while the market may hit overvalued territory, it is currently balanced. He advises caution for buyers and anticipates a shift in demand towards midrange suburbs if interest rates decline (Hegney).
Trent Fleskens from Strategic Property Group echoes optimism, highlighting that sustained population growth will continue to exert upward pressure on prices, potentially exceeding double-digit growth in 2025. He emphasizes the importance of amenities in driving buyer preference (Fleskens).
Nerida Conisbee, chief economist at Ray White, indicates that while price growth will persist, it may slow as mortgage fatigue sets in amid high interest rates. Still, she anticipates that ongoing construction cost inflation and population increases will sustain price increases, particularly in outer suburbs (Conisbee).
Tim Lawless, CoreLogic research director, notes a potential slowdown in growth to under 10%, emphasizing affordability concerns and a slight increase in housing supply as factors influencing the market outlook. However, he expects scarcity in desirable areas to support prices (Lawless).
Peter Gavalas, a buyer’s agent, projects a more tempered growth rate of around 10%, reiterating that the current economic environment remains favourable for buyers, particularly local ones, due to demographics and employment rates. He advises potential buyers to act quickly to avoid the challenge of rising prices (Gavalas).
