Western Australia: Early‑stage BtR with long‑term potential

Western Australia (WA) remains one of Australia’s smallest Build to Rent (BtR) markets, accounting for just over four per cent of the national BtR pipeline. With fewer than 800 apartments across operating, under‑construction and planned projects, the sector is still firmly in its formative stage. However, this modest scale sits alongside one of the most structurally undersupplied rental markets nationally, underpinning expectations of continued rental growth over the medium to long term.

The primary constraint on BtR delivery in WA is feasibility. Construction costs remain elevated, exacerbated by the limited depth of tier‑one builders in the local market and additional upward risk from ongoing geopolitical volatility. While rents continue to grow, achievable rental levels have struggled to keep pace with cost escalation, constraining the ability of institutional capital to underwrite projects at scale.

As a result, WA continues to play a secondary role in BtR capital allocation decisions. Institutional investors are unlikely to prioritise the state ahead of larger east coast markets absent a clear diversification imperative, heightened competitive pressure in those markets, or a return premium sufficient to offset perceived scale, liquidity and delivery risks. Addressing these structural challenges will be critical if WA is to translate its undersupplied rental market into a more meaningful institutional funded BtR pipeline over time.

Policy support is available, but gaps remain

Policy settings provide a degree of support for BtR in WA. In February 2026, the WA Government announced a 50 per cent land tax reduction for up to 20 years for eligible BtR developments, with concessions increasing to 75 per cent in the early years for qualifying projects. The state also does not impose a material foreign land tax surcharge, removing a common friction point for offshore capital.

However, the overall impact of these measures on feasibility is comparatively muted. Lower underlying land values in WA mean land tax concessions deliver less absolute benefit than in major east coast markets, limiting their ability to materially shift project economics. While WA has emerged as a market leader in planning reform, the barriers constraining BtR delivery and institutional investment extend beyond planning settings alone.

Improving fundamentals to encourage growth

Despite these challenges, WA’s rental market fundamentals are strengthening. Population growth has rebounded, vacancy rates remain tight, and affordability pressures are increasing. As one of the strongest rental markets nationally, these conditions provide a supportive backdrop for BtR, particularly for platforms willing to establish an early foothold ahead of broader market maturation.

In the near term, we expect BtR growth in WA is likely to remain selective rather than expansive. Projects that progress will be carefully calibrated in terms of scale, product mix and location. Over time, however, WA has the potential to transition from an emerging market to a more meaningful contributor within Australia’s BtR landscape. The pace of this transition will be shaped by the effectiveness of government intervention, easing construction pressures, and relative capital allocation dynamics, including competition and yield compression in east coast markets.

Discover WA’s place in the national BtR landscape

BDO’s 2026 Build to Rent report provides a comprehensive overview of Australia’s BtR sector, with state‑specific insights into emerging markets like WA and the conditions required for future scale.