Perth under pressure: Record WA population growth ramps up demand for houses, schools and skills

From higher housing prices to increasingly full classrooms to busier freeways, there’s no escaping the fact that Perth is getting bigger and busier — and experiencing real growing pains. For the first time in nearly a decade, it is the fastest-growing capital city — the population jumping 3.6 per cent in the year to June 30, equalling record growth of 2011-12. That’s another 81,300 people who now call Perth home — or nearly double the entire population of the City of Albany. Perth’s population has now edged past 2.3 million, the Australian Bureau of Statistics reports, and official forecasts put that figure at nearly 2.6 million by 2030. As the bigger east coast capitals get more expensive and less liveable — analysis last year showed Sydney was the world’s sixth-least affordable city to live in, costing its economy more than $10 billion per year — Perth’s relative affordability and ease of living has become particularly attractive. The influx is naturally putting pressure on housing demand. Perth property values have surged 56 per cent, or $253,000, since the onset of COVID, and are now at a record high of $703,502, according to analysts CoreLogic, while rental vacancy rates are persistently low. But though the State has been working towards a population expectation of 3.5 million for some time — fuelling projects such as Metronet — the jump in young families moving to WA and particularly Perth in recent years was not anticipated, UWA school of social sciences head Amanda Davies said. That exacerbated challenges like primary schools bursting at the seams, she said, notably, but not uniquely Highgate. “There is that displacement going on, and you certainly are seeing people now, mainly families, not being able to purchase a house and have an affordable life, particularly in the medium socio-economic group where there is an expectation of home ownership,” Professor Davies said. “That’s just not a plausible option for some on the east coast. So they are moving to WA for that reason.” For others, a move to WA was a career choice. Joseph Gavini moved to Perth about two years ago after graduating from university in his hometown of Adelaide. No WA universities offer his bachelor of medical radiation science, so clinics in Perth have to impress upcoming graduates to have them make the move. Mr Gavini said he chose Perth over the Sunshine Coast for its lifestyle and social opportunities — impressions that still held. “I feel great about (the move) — no regrets,” he said. “Perth is definitely home, there’s a good lifestyle here ... it’s easy, nothing is too far away. “It just offers more in terms of events in the city (too), there’s more recreational things to do.” Interstate migration has been hot but growth is moderating to more measured levels, according to James Morrell, chief executive of Muval, a removalists comparison site. Official statistics date to September or June last year and use various sources including Medicare change of address data. WA is also experiencing strong international migration, but Professor Davies said the data showed many were students, which helped in sectors like hospitality and retail — and the university sector — but skilled migrant arrivals were lagging and would continue the labour market headache. “You can see that really starting to result in some serious pressures — particularly in housing and construction, manufacturing, and engineering areas. So that’s pretty problematic,” she said. “The data really shows that, more shockingly than I had previously expected that it would show. I had expected there to be more skilled migrants coming through. It’s just the time it’s taking to process those that’s really slowing it down. So it’s nothing to do with demand, it’s to do with processing.” Chamber of Commerce and Industry WA chief economist Aaron Morey said the Federal Government’s migration policy late last year “missed the opportunity” to fast-track entry of blue-collar tradespeople “that we are really, desperately, crying out for”, prioritising skills like cybersecurity and AI. Omitting blue collar trades “hurt WA more than anywhere else”, he said. “Unfortunately there are these restrictions now on being able to fast-track the entry particularly of some of these blue collar trades,” he said, “and it’s gong to harm the WA economy, no doubt about it,” Mr Morey said. Labour economist Conrad Liveris said the figures suggested there was a difference to Perth’s last population surge during the mining boom. This time around, Perth was establishing itself as a “family city” given the number of people bringing young children, rather than a party city or just a place for single men. But that inherently challenged the city’s housing stock, and it was perfectly reasonable for families to expect somewhere to live. The WA Local Government Association says the the ongoing shortage of housing is “acting as a handbrake on economic growth”, affecting communities statewide. The rental market — often a first step for new arrivals — has been stretched for years, with vacancy rates falling in Perth from 1.1 per cent in February 2022 to 0.7 per cent in February this year. The situation is worse in Albany and Geraldton, while more homes are for lease in Kalgoorlie and Bunbury though the market is still tight. Mr Liveris is blunt about the housing challenge: “People are going to be very disappointed and it’s actually going to ruin the reputation of WA. “People won’t want to move and the next time that we actually do desperately need people they’re going to be very hesitant . . . so if that isn’t fixed, it’ll actually ruin WA for potentially a generation or so.” Mr Morey expects population growth will abate in coming months and years, as well as the migration program to become an election issue in next year’s Federal poll. But housing challenges are likely to remain until construction noticeably kicks up. “We absolutely want to see large population centres in WA, it’s good for local business . . . it’s good for society and social cohesion,” Mr Morey said. “But what we want is a system that facilitates and absorbs significant growth of people to this State.”