Perth’s apartment shortfall is really a suburb-by-suburb problem

Perth’s population is growing faster than any other Australian capital, yet recent analysis suggests the city will deliver only around half of the apartments needed to house that growth.

Fresh analysis from Charter Keck Cramer’s State of the Market H1 2026 report showed Perth’s apartment supply will average around 1900 completions annually over the next three years, against underlying demand of up to 4200.

It is tempting to read that as a simple call for more supply, anywhere, of any kind. But supply does not land evenly across a city, and where it can be delivered matters just as much as how much gets delivered overall.

Whether an apartment project gets off the ground or not usually depends on three variable factors: construction cost, land value and the price each dwelling can achieve on completion.

With construction costs in Perth having risen sharply in recent years and little sign of that reversing, the achievable market price has been left to carry most of the weight, and this is where Perth diverges from other capital cities.

Charter Keck Cramer’s research showed the average Sydney house sells for about $657,000 more than the average apartment.

In Perth, that gap narrows to roughly $320,000, leaving developers far less room to price an apartment before it starts competing directly with detached houses on cost alone.

This effect is not spread evenly across the city. Where achievable prices are highest, typically in high-end and well-located suburbs, apartment construction remains viable even as costs have climbed.

In middle and outer suburbs, where the housing crisis and affordability pressures are arguably more severe, the same construction cost applies but the achievable price does not stretch far enough to cover it.

That pattern exists in every capital city. What sets Perth apart is that its thinner pricing buffer leaves far less room to absorb rising costs before a project falls out of feasibility.

A cost increase that a Sydney project can absorb within its buffer can be enough to rule out an equivalent project in Perth.

This changes what closing Perth’s shortfall actually requires. Approving more apartments will not, by itself, deliver homes in the suburbs that need them most, while construction costs continue outpacing what a thinner Perth market is prepared to pay.

Closing the gap will depend less on how many apartments get approved and more on whether the suburbs where the numbers can work are allowed to grow beyond the small list they currently sit within.