Much of the current discussion around property markets is focused on negative forces, rising interest rates, global instability, fuel costs, and softer buyer sentiment.
On the surface, these factors should place downward pressure on prices. But across Perth, and particularly in the City of Belmont suburbs such as Rivervale, Belmont, Redcliffe, Cloverdale, Ascot and Kewdale, something more structural is happening beneath the surface. It centres on developers.
A Market That No Longer Stacks Up
Across Perth, including key infill areas like Rivervale, Cloverdale and Kewdale, the economics of development have changed significantly. Construction costs have risen sharply over recent years, materials, labour, compliance, and time delays. At the same time, higher interest rates have increased holding costs and reduced margins.
For developers, the equation is simple, if a project does not make financial sense, it does not proceed. What we are increasingly seeing is not just caution, but withdrawal.
Projects that may have been viable two or three years ago are now sitting on the sidelines. In many cases, developers are choosing to sell sites rather than build, particularly in established suburbs like Belmont and Redcliffe where development activity has traditionally been strong.
When Land Sells, but Housing Does not Get Built
This shift creates an important and often overlooked consequence. When a development site is sold without being built on, the land still transacts, but the housing that was intended for that site never materialises.
Instead of delivering 10, 20, or even 50 new dwellings, the outcome becomes a single land sale, and no increase in housing supply. Repeated across areas like Ascot, Rivervale and Cloverdale, this pattern has a cumulative effect.
Perth’s Supply Problem Is Getting Worse
Perth was already experiencing a shortage of housing. In the City of Belmont, this is particularly evident, with strong demand across suburbs like Belmont, Redcliffe and Kewdale, combined with limited new stock coming to market.
Population growth has strengthened, rental vacancy remains tight, and new construction has struggled to keep pace with demand. Now, with developers stepping back, the pipeline of future housing is quietly shrinking.
This is not always visible in headline figures, but it is significant. Fewer projects today mean fewer homes delivered tomorrow.
The Paradox in the Current Market
At the same time, broader economic pressures are weighing on sentiment, higher interest rates, increased cost of living, and global uncertainty. Ordinarily, these factors would lead to falling prices.
But property markets are ultimately driven by supply and demand. In Perth, and particularly in tightly held suburbs like Ascot and Rivervale, demand may be moderating, but supply is tightening more quickly. That creates a stabilising effect.
Why Prices Are Holding Up
The reduction in new housing supply is acting as a counterbalance to softer demand. Even as buyers become more cautious and borrowing capacity declines, there are simply not enough properties available, especially in well-located areas close to the CBD such as Belmont, Cloverdale, and Redcliffe.
This shortage limits downward pressure on prices. Rather than a sharp correction, the market is more likely to experience slower activity, longer selling times, and more negotiation, but with underlying price support.
Developers as a Market Signal
Developers are highly sensitive to market conditions. They operate on margins, risk, and forward projections. When they stop building, it sends a clear signal, at current costs, new housing cannot be delivered profitably at current prices.
This has two important implications. Existing homes become relatively more valuable, and future supply will remain constrained.
A Market That Feels Softer Than It Is
The result is a market that can feel uncertain without necessarily weakening significantly. Confidence may fluctuate. Activity may slow. But the underlying imbalance, too few homes for the level of demand, remains in place, particularly across the City of Belmont corridor where supply remains tight.
The Bottom Line
The key force shaping Perth’s property market right now is not just interest rates or global events. It is development feasibility. As building costs rise and projects become less viable, developers pause, housing supply contracts, and the shortage deepens.
In areas like Rivervale, Belmont, Redcliffe, Cloverdale, Ascot and Kewdale, this dynamic is already playing out and quietly supporting property values.
Andrew Huggins is Principal of Ray White Urban Springs, the top real estate agent in the City of Belmont for over 20 years. He writes about Perth property trends, WA real estate insights, Australian housing supply and demand, and long-term investment strategy.
