Is Perth’s Surge in New Housing Supply Enough to Slow Prices?
Perth is on track for its strongest year of new housing supply in nearly a decade – but the big question remains: will it be enough to ease pressure on prices?
According to the latest data, building approvals, commencements and completions are each on pace to reach around 22,000 dwellings in 2025.
Aside from the one-off COVID stimulus peak in 2021, this would make 2025 Perth’s busiest year for new housing since 2016.
With all three key indicators of new housing supply at near-decade highs, the question has to be asked – how will this impact the market and property prices?
Will supply meet demand?
Looking at the demand side, WA continues to lead the nation in population growth, with the state growing at 2.3% per year.
That equates to around 67,000 new residents annually, with approximately 53,000 of those arriving via interstate or overseas migration.
Using WA’s average household size of 2.3 people, around 23,000 new homes are needed each year just to keep pace.
With 22,000 homes expected to be delivered in 2025, WA still falls short by roughly 1,000 dwellings annually.
Rent Choice Managing Director Clare Christiansen said that was a big shortfall, especially in the current context of Perth’s property market.
“In a normal market, a shortfall of 1,000 homes might not seem like much,” Clare said.
“But when you only have 3,000 homes for sale across the entire city – and a balanced market is closer to 12,000 — every dwelling counts.”
What does this mean for Perth property prices?
While supply is rising, it's important to remember that Perth is not a single market. The impact of additional homes will vary across different suburbs.
Most of the new stock coming in 2025 will be:
- New houses in outer suburban estates.
- Apartments in key activity centres.
These are the areas most likely to feel pricing pressure as supply increases.
“We’re already seeing early signs of this in the rental market,” Clare said.
“In newer estates, investors are now competing with multiple brand-new properties coming online at the same time — and that naturally puts pressure on achievable rents.”
Which Properties Are Better Protected?
While outer-suburban estates and new apartment corridors may see some softening, certain parts of Perth remain highly resilient.
Properties most likely to hold value include those:
- On good-sized land parcels
- In the inner and middle rings
- Close to the river, coast, strong school zones, and major transport routes
“These areas benefit from limited land availability and very strong demand drivers,” Clare explained.
“That combination helps to insulate them from the impact of new supply being delivered on the outskirts of the city.”
Where to for Perth property from here?
Perth is finally getting the increase in new housing it desperately needs – but demand is still winning the race.
The city remains structurally undersupplied, and while price pressure may ease in pockets, especially in outer estates and apartment-heavy areas, broader relief is unlikely until supply outpaces population growth for a sustained period.
“For now, Perth remains a competitive market, and that’s unlikely to change meaningfully until we see a shift in the balance between population growth and new housing delivery,” Clare said.
