Recent data from Urbis shows that just 19 per cent of Perth apartments that have been approved since 2020 have started construction.
High construction costs and skills shortages are continuing to impact Perth’s new apartment market, with just 19 per cent of projects approved since 2020 under construction.
Urbis’ recent Apartment Essentials data shows that in Perth, like other Australian cities, is struggling to get projects off the ground.
Perth is faring better than Brisbane, where just 16 per cent of projects approved since 2020 have gone ahead.
“This low level of apartments that are proceeding reflects the high-cost environment and challenges with finding a builder and shows how challenging it is for developers,” Urbis director property economics and market research David Cresp said.
In Melbourne, 30 per cent of apartments approved since 2020 have gone ahead, compared with 28 per cent in Sydney.
Mr Cresp added that apartment starts in Perth were at a “problematic level”, due to low building capacity and escalating build costs.
“It will get better over time,” he said.
“Some developers are becoming builders, which is taking some of the pressure off.”
Perth’s $13 billion Metronet project and other major road infrastructure projects are nearing completion, which should also take pressure off the building market.
Urbis forecasts show that apartment completions are expected to increase slightly next year, from 1,561 in 2025 to 1,585 in 2026.
This represents a significant increase on 2023 and 2023, when 769 and 745 apartments were completed in Perth.
Value
Sales prices of apartments continue to climb, with Urbis forecasts showing that Perth’s median house price is projected to reach $850,000 by the end of 2027.
More than $1 billion of new apartments sold in Perth in the 12 months to the end of March this year.
In the first quarter of 2025, average prices for new apartments reached $1.23 million.
This was led by the western suburbs, where the average sale price was $2.2 million.
Mr Cresp said that while premium apartments dominated the market, there was an increasing volume of more affordable products.
“We are seeing an increase in the number of apartments aimed at a more mid-market position, catering to a broader and more affordable market,” he said.
“The Perth apartment market continues to evolve, driven by strong population growth, rising house prices, and a need for diverse housing options.
“The industry remains resilient, with new projects and approvals ensuring a variety of housing solutions for different household types and income ranges.”
Housing starts
Meanwhile, recent data from the Housing Industry Association shows that the number of detached dwellings commencing construction Australia wide is expected to increase in the next few years.
“We expect new home commencements to increase steadily through the second half of the decade,” HIA national chief economist Tim Reardon said.
“Detached house building will lead this recovery, peaking in 2027, with apartment construction set to follow as market conditions and policy settings improve.”
