Land supply is at its lowest level in Perth in 18 years as WA grapples with a housing supply crisis.
According to fresh data from the Urban Development Institute of Australia WA, just 617 lots were on the market as at March 31.
This is 34.5 per cent decline on the previous quarter and 70 per cent lower than the same time last year.
The drop in supply is coupled with a dramatic lift in demand, with UDIA WA’s data showing a 30 per cent increase in the number of lots sold during the March quarter.
The increase in sales over the year was an astronomical 135 per cent, according to the data.
UDIA WA chief executive Tanya Steinbeck said the state’s strong economic conditions, growing population and relative affordability continued to attract a range of buyers to the market.
“Perth, like cities across the country, is grappling with an acute housing supply shortage.
“This is the result of years of systemic failure in strategic planning to ensure we have a sustainable forward pipeline of housing supply.”
Despite construction figures reflecting an increase in activity, Steinbeck warned that the supply shortfall was expected to continue well into 2025 if more was not done to alleviate the challenges in getting housing to the market, faster.
“UDIA WA has forecast a 30,000 shortfall in housing supply over the next five years,” she said.
“Developers in greenfield areas simply cannot bring new development stages on fast enough to meet demand and this is now having a significant impact on prices with lot prices up 15 per cent increase over the last 12 month and 5.2 per cent just in the first three months of 2024.”
Urbis director David Cresp said that while the volume of lot sales had increased substantially, the shortage of lots completed meant that many of those sales will not settle for another six or nine months.
ABS data confirmed that the number of new homes where construction had begun had fallen each quarter since its peak in 2021, the UDIA WA said.
The UDIA WA said this “highlights that the building industry is still struggling to keep up with demand, but there is a strong pipeline of work ahead based on lot sales”.
Investor demand remained strong in the first quarter of this year and accounted for 32 per cent of sales.
However, this was a decrease from 2023 when 36 per cent of sales were to investors.
“Much of this investor demand continued to come from the East Coast, however my understanding is that many developers are now actively trying to limit the proportion of investors buying into their estates to ensure that they get a good mix of residents in the community,” Cresp said.
This quarter has had an increase in first-home buyers who accounted for 33 per cent of sales, increasing from a low of 29 per cent the final quarter of 2023.
Steinbeck said that although the industry welcomed the State Government’s focus on housing as a critical issue in recent times, more needed to be done to directly support the private industry in delivering more housing.
“The private industry in WA delivers around 96 per cent of homes to the market,” Steinbeck said.
“While the recent State Budget had a focus on social and affordable housing, we must look at how we can deliver more housing right across the continuum from social and affordable housing through to rentals, first-home buyer options, downsizer options and everything in between.”
Roadblocks to getting more land to the market include lack of funding and coordination of essential infrastructure, and unnecessary red and green tape.
Steinbeck said a more holistic approach across government was needed to ensure supply was being delivered across the housing continuum.
