Perth Land Prices Break $400,000 Barrier as Supply Crisis Deepens
For the first time in Perth's history, the average price of new land sold in a single quarter has soared beyond $400,000, highlighting the severe and ongoing housing supply crunch in Western Australia. According to the latest Urban Development Index from the Urban Development Institute of Australia (UDIA WA), the average price reached $410,784 during the December 2025 quarter, marking a significant 8.8 per cent increase from the previous period.
Sales Volumes Decline Amidst Unabated Demand
While prices have skyrocketed, the number of new lots sold across Greater Perth has moderated sharply, falling by 25.4 per cent. This decline is not indicative of weakening demand; rather, it reflects the constrained supply that developers are struggling to overcome. Perth continues to experience the highest population growth in the country, coupled with robust economic indicators, which sustain strong buyer interest. Government incentives, such as the Federal Government's Help to Buy Scheme, have further bolstered demand, creating upward pressure on land prices that shows no signs of easing.
Infrastructure Barriers and Stock Shortages Exacerbate Crisis
Developers are working tirelessly to bring land and housing-ready lots to market, but they face significant hurdles. Key constraints include delays in enabling infrastructure—such as power, water, and roads—which are essential for unlocking new developments. The supply challenge is starkly illustrated by the critically low levels of available stock. As of December 31, 2025, only 293 lots were on the market, a 25.4 per cent drop from the previous quarter and well below the five-year rolling average of 1,323 lots.
Government Efforts and Future Recommendations
UDIA WA has acknowledged the State Government's focus over the past two years on supporting housing delivery through targeted measures. The Cook Government's housing policy commitments, both before and during the 2025 State Election campaign, were reflected in the last State Budget. However, the crisis remains far from resolved. In its 2026-27 Pre-Budget Submission, UDIA WA has outlined several key recommendations to accelerate land and housing supply. These include an additional $100 million for the Water Corporation for essential capital works, funding a comprehensive review of land supply forecasting by the Department of Planning, Lands and Heritage, investment in an online platform to enhance efficiency in WA's planning system, and expanding the State Government's initial $400 million Housing Enabling Infrastructure Fund to catalyse development in growth areas through critical infrastructure like power and water connections.
As Western Australia looks toward the 2026–27 State Budget, targeted investment is deemed critical to meaningfully accelerate housing choice and supply across the region. The ongoing supply crunch underscores the urgent need for coordinated action to address infrastructure barriers and boost market availability.
