A shift toward medium-density housing could be the most effective way to address Perth’s deepening housing crisis, according to buyer’s agent Peter Gavalas (pictured) of Resolve Property Solutions.
Gavalas argued that outdated planning policies are failing to keep up with surging population growth and housing demand, contributing to skyrocketing rents and limited supply.
New data from Ray White revealed that Perth remains the country’s least densely developed capital, with units making up only 23.9% of the city’s dwellings.
In contrast, Adelaide and Brisbane sit at 26.2% and 28% respectively. Meanwhile, Cotality reported that Perth has experienced a 63.9% spike in rental prices since March 2020—Australia’s sharpest increase over the past five years.
Further highlighting the strain, the city’s rental vacancy rate has hovered around just 0.4% for the past year, leaving prospective tenants with limited options and pushing many to spend more than 30% of their income on rent amid a highly competitive and increasingly unaffordable market.
Gavalas advocated for a mix of housing that better reflects community needs, saying medium-density options in desirable locations could fill a significant market gap.
“High-density housing doesn’t have strong uptake in Western Australia, so the focus should be on increasing the supply of medium-density homes in the suburbs people actually want to live in,” he said.
He highlighted that many downsizers, in particular, wish to remain in their familiar neighbourhoods but are unable to find appropriate housing.
“We’re simply not building enough quality medium-density housing in these areas,” Gavalas said.
February statistics from the Australian Bureau of Statistics showed 1,391 private-sector house approvals versus only 809 for other housing types, such as semi-detached and townhouse-style dwellings—emphasising the imbalance in supply.
Gavalas said the lack of medium-density stock is clogging up the broader property market.
“With too few medium-density options, potential sellers, including would-be downsizers, hold onto their family homes, adding to the shortage of supply in that sector,” he said.
Gavalas believes the city’s over-reliance on detached housing is exacerbating affordability issues and expanding urban sprawl—two challenges that medium-density planning could alleviate.
Gavalas stressed that zoning constraints are a major roadblock to building the types of homes Perth urgently needs.
“Reforms that allow for more flexible and responsive planning outcomes, particularly in established suburbs, are critical,” he said.
Gavalas called on the state government to introduce more supportive measures for developers, including adapting tax incentives currently available to the build-to-rent sector.
“We need to do more to support developers,” he said. “Tax concessions like those now on offer for build-to-rent developments are a good start, but they need to be adjusted for WA’s medium-density sector as this is where demand lies.”
To reduce pressure on infrastructure and better meet growing demand, Gavalas said the city should prioritise infill development over expanding the urban fringe.
“We can’t keep pushing growth to the urban fringe,” he said. “Encouraging more medium-density living is the most practical and sustainable way to tackle Perth’s housing shortage.”
