WA Signals New Era as Demand, Defence and Development Surge

Perth is running hot and the state government knows it. Cotality’s home value index this week found that Perth’s median house value has hit $914,229, after rising at an “unsustainable” $5000 per week and soaring 13.2 per cent in the past 12 months. Behind the surge is a state drawing intense interest from job-generating sectors including defence, mining and manufacturing. Last week, major east coast developer Mirvac was appointed to develop the first stage of a 4000-home project in Perth’s southern growth corridor underpinned by the growth of the Henderson Defence Precinct to the north. The move signals the launch of major developments centred around current and future employment areas, with more than $20 billion flooding into WA for the delivery of Australia’s AUKUS obligations and the creation of 10,000 construction and shipbuilding jobs. It has already triggered the expansion of the HMAS Stirling Naval Base in Rockingham, and the state government signalled its intention to develop shipbuilding and manufacturing precincts with a newly introduced State Development Bill. All this to say, WA is on the up and the state government is making moves to attract not only industry, but development too. New era for WA development The State Development Bill marks a significant shift in how WA intends to fast-track major industrial and defence projects. Norton Rose Fulbright partner Troy McKelvie says that the Bill provides the state development minister and coordinator general with powers to fast-track approvals for strategically important developments. These are namely in clean energy and defence; areas that the government considers “key to WA’s future”. “It has the potential to streamline and coordinate strategic projects in WA and encourage within the precincts in the state development areas, the development of common use infrastructure,” McKelvie says. ▲ HMAS Stirling Naval Base at Rockingham. One of the great challenges Australia has and is particularly the case in WA, he says, is how to develop the “value-adding components” to resources industries. “It suggests that feedback the government is getting from developers is the complexity and size of those projects, if done in an uncoordinated way, create barriers to entry.” McKelvie says that the Bill is a clear signal that WA wants more private investment in major projects, and the location of new employment-generating precincts will be crucial for developers assessing future opportunities. And this is just what developers like Mirvac need to see the potential in new WA suburbs. Mirvac general manager for residential development WA Elysa Anderson says that it looks for locations with strong population growth and long-term potential. ▲ Mirvac general manager for residential development WA Elysa Anderson. “[Karnup’s] proximity to the Western Trade Coast, Westport and emerging defence investments positions Karnup for economic and employment opportunities,” she says. “And the site addresses the undersupplied Perth market, providing much-needed housing for a growing population.” Housing demand surges but construction stalls Yet, while job opportunities are growing, WA housing supply is not keeping pace. Urbis data shows that 10,000 apartments approved in Perth since 2020 have not yet started construction. It’s less a housing crisis than a “housing construction crisis”, Urbis director Tim Dawkins says. “Western Australia has a less mature capability in building higher density residential projects, and has the additional challenge of competition for skilled labour with the mining sector,” he says. And it’s not just mining that is providing competition, says Erben managing director Luke Reinecke. ▲ Erben managing director Luke Reinecke: Mining not the only competitor for construction labour. “The government is embarking on a very significant investment in social and affordable housing and while necessary, the extent of activity is compounding the challenges faced by industry,” he says. As with much of the rest of Australia, there have been significant increases in materials costs, labour costs, and financing costs in WA, says Colliers urban planning director Nick Brisbane. “[This has] all combined to a situation where the next wave of apartment development will need to realise sales prices materially higher than the previous generation of new stock.” What may have realised a sales price of $10,000 per sq m several years ago, will now in some instances need to realise $13,000 per sq m to be commercially viable, he says. “In some instances, the market has not yet accepted this change and projects have stalled as a result,” Brisbane says. Government focuses The aim of many councils and indeed the state government has been to limit urban sprawl, which was the aim of the recent station precincts announcement. “[But] some of the local authorities have been very slow to embrace medium and high density living options … the state government’s decision will assist in progressing these precincts at a faster pace,” Reinecke says. ▲ A rendering of Erben’s Windfall Residences at Port Coogee. Developers also face issues with site selection and long planning timelines. “We do not reward land assembly as well as we should,” Dawkins says, adding that proposals capable of mitigating impacts through larger, consolidated sites should be encouraged. With 30 metropolitan councils and 139 local governments statewide, the WA planning system still imposes a “significant” administrative burden, Dawkins says. Fast-moving markets testing the system There has been progress. The Infrastructure Development Fund has been heralded as a key initiative, and so has the transition of home loan initiative Keystart to become a government traded enterprise, which Reinecke called a “standout” policy. And overall, the government’s focuses have aligned with those of developers like Erben. “And the announcement of station precincts may influence investment decisions subject to the proposed planning changes and how they impact project viability which is challenging in the current market,” Reinecke says. The station precincts have led major developers like Mirvac to “actively consider” opportunities in these areas, and with a state government that has proven its flexibility to planning reform, WA is showing its planning chops. ▲ A sketch of the new high street at the Mirvac Karnup development. “Our confidence in the WA market is reinforced by the state government’s ongoing investment in housing solutions, including initiatives to increase affordable housing supply, support first-home buyers, and encourage sustainable urban development,” Anderson says. “We commend the state government for its leadership in driving a more strategic, co-ordinated, and reform-focused work that is essential to unlocking housing supply.” WA remains a “standout economic performer”, according to Colliers national director Dean Johnston. “[It is] not only the fastest growing state, but the tightest labour market in the nation also sitting currently at 4.1 per cent as at October 2025. “These indicators coupled with low interest rates have fuelled demand for housing and land sale activity although presented the challenges to deliver supply at pace. “With the new planning reforms introduced, it will aid in relieving supply pressures currently present,” Johnston says. But with such rapid change on the horizon for WA, there are concerns that reform will not keep up. “Rapidly changing areas such as data centres and the living sectors are moving at significant pace, and that makes reform challenging,” Dawkins says. “But the more options and pathways we have, the better we can achieve a quality and timely outcome—which hopefully results in actual delivery coming out of the ground.”

WA Signals New Era as Demand, Defence and Development Surge

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