WESTERN Australia has recorded the lowest proportion of medium-density housing as a percentage of total dwelling approvals of any mainland state for the year to March 2017.

Bankwest’s annual Housing Density Report, released earlier this month, found just 26.9 per cent of approvals in WA were for medium-density housing, significantly lower than NSW at 60.6 per cent and Victoria (46.9 per cent) of total approvals. WA also came in behind Queensland (45.3 per cent) and South Australia (28.7 per cent).

While the proportion of medium-density housing approvals has remained above the 20-year state average of 19.8 per cent (see graph), WA still falls significantly behind the national average, where 48.8 per cent of total dwelling approvals in Australia were for medium-density housing in the year to March 2017.

Urban Development Institute of Australia WA chief executive Allison Hailes said the Sydney and Melbourne markets largely drove the national result, due to the relative scarcity of land and high house prices in those states.

Collectively, NSW and Victoria accounted for more than half (64 per cent) the country’s medium-density housing stock in 2016, with WA representing just 8 per cent.

“Many purchasers in Perth are looking for the affordability and lifestyle that houses in the outer suburbs offer, and we need to ensure a balanced approach to housing supply,” Ms Hailes told Business News.

“Housing approvals generally have fallen, including for medium-density development in WA, as developers cut back on supply to be more in line with current demand.

“However, the Bankwest report does confirm there is a growing market for medium-density housing in our inner and middle-ring suburbs, and particularly those with high levels of amenity, good access to public transport and community services.”

Although medium-density stock has continued to make up a small proportion of WAs housing market -177,962 dwellings compared with 685,824 standalone homes registered in the 2016 Census – there has still been significant growth in apartment residences.

Between 2011 and 2016, WAs medium-density housing stock grew by 15 per cent, outstripping the growth in stand-alone housing at 7.4 per cent, which also represented the largest increase in stand-alone homes of all Australian state and territories during this period.

Ms Hailes said this demand was reinforced by the fact that the fastest growing area in the country for apartments in the 12 months to March 2017 was in the Claremont-Cottesloe area, where just over half (50.2 per cent) of all housing approvals were for medium-density housing, up from just 7.1 per cent the previous year.

“Significantly, many of the people that are purchasing in these suburbs are existing residents and can afford to purchase in the area,” she said.

LandCorp’s Claremont on the Park development, where there are plans to build more than 750 apartments, could be a likely reason for the skewed results.

Melville was listed as the second fastest growing area for apartments in the state, followed by Joondalup.

Perth City, which extends from Shenton Park to Inglewood, took out the top spot for the largest number of medium-density approvals in WA during the period, with 86 per cent of total dwelling approvals for apartments, followed by the Belmont-Victoria Park area, Fremantle, South Perth, and Stirling.

“What’s really important for Perth’s future is that state and local governments modify current planning policy settings to ensure we can respond to demand for medium-density developments in an affordable and timely manner, in all suburbs,” Ms Hailes said.

“This will be particularly important for existing areas that are well serviced by community infrastructure and public transport, and the new precincts that will be created by the roll-out of MetroNet.”