Perth’s housing market is tight and buyers are getting creative. One trend that is gaining traction is the modest block: compact locations tucked behind established streets that provide a unique path to well-located suburbs.
With total listings in Perth lower than last year and properties selling faster, it’s no surprise that these smaller plots are attracting interest.
This small block on a laneway is located in one of Perth’s most desirable suburbs. Image: realestate.com.au
The shift does not come out of nowhere. WA’s long-standing Livable Neighborhoods policy encouraged walkable, dense development and greater diversity in lot sizes; Combine that with renewed demand and a shortage of available stock, and you get more appetite for compact blocks close to amenities.
In suburbs such as Scarborough, North Perth and Mount Lawley, homes built on quiet streets are proving irresistible to downsizers, investors and first home buyers looking for affordability without sacrificing location.
In beachside Scarborough, a modest 216 square meter block on Motteram Lane, described as the “first and only block to have a dedicated postal and service address for Motteram Lane”, is one of several street-facing houses recently on offer.
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A vacant 216sqm block on Motteram Lane is one of several Scarborough ‘laneway homes’ recently on offer.
Listing agent Giovanni Notte says the sale reflects a clear shift in buyers’ priorities.
“It was the first of its kind in the council region, and we are seeing more subdivisions like this popping up in the inner suburbs,” Mr Notte said.
“The council is getting on board. What we saw with the property on Scarborough Laneway is that people are happy with smaller, more compact homes. These properties are low-maintenance and tucked away, which adds real charm.”
Perth’s housing market remains one of the tightest in the country, with house prices growing at the second fastest annual rate of any capital city, behind Brisbane.
Economic analyst Megan Lieu of the REA Group says that although price growth has slowed in recent months and demand has declined, market activity is still high.
“The shortfall in new home completions, relative to population growth in Western Australia, is approximately 20%,” Lieu said, “further contributing to supply pressure in the market.”
As a result, buyers are turning to unconventional plots of land, including alleyways, as creative alternatives to traditional blocks.
“Laneway homes take advantage of underutilized spaces,” says Ms. Lieu. “They are usually found in urban areas, close to amenities and public transport. They encourage more productive land use and have good lifestyle elements.”
‘Hidden gems’ that are in high demand
For agent Nadija Begovich of The Perth Property Co. the demand for ready-made ‘lock-up and leave’ addresses has become undeniable.
“Buyers love the sense of privacy and character,” she said, “they feel like hidden gems.”
She points to recent examples that illustrate the appeal.
This boutique block on an avenue has three modern units. Image: realestate.com.au/sold
In Mount Lawley, this modern, almost new one-bedroom unit at 131A West Parade is being offered after just a few days on the market and has attracted strong interest from first home buyers.
Ms Begovich, one of three in the area, said the “1 x 1 x 1 unit is such a good example of what you can build on a laneway.”
“I wish I had four more because there were so many buyers who missed out! Not only is the livability great, there is great rental potential.”
A three-bedroom house on Sholl Lane in North Perth sold quickly. Image: realestate.com.au
Further north, a three-bedroom house on Sholl Lane was demolished “super quickly,” Ms Begovich said, “another good example of what you can do with a lot that has access to a laneway.”
As a historical touchstone: “Dulce House,” a two-story home that sold for $1,200,000 in 2021 and showcases the street’s appeal on the architectural side of the market.
Laneway homes can provide architectural flair in a convenient downtown setting. Image: realestate.com.au/sold
Beyond price and location, laneway homes offer a lifestyle that feels both connected and enclosed. With no through traffic, they are quieter, friendlier and offer a good mix of convenience and tranquility – like little secret worlds behind the main street.
In coastal suburbs like Scarborough they even promise glimpses of the ocean from compact locations, proving that size isn’t everything.
A small but mighty trend
The moment in Perth did not come out of nowhere. The concept has been quietly incubating since the early 2000s under the government’s Liveable Neighborhoods policy and the City of Perth’s ‘Forgotten Spaces’ strategy – best known for transforming gritty alleyways such as Wolf Lane into vibrant public destinations.
Together, these initiatives have reimagined Perth’s laneways from back-of-the-house service routes to valued public and residential spaces, laying the foundation for fine-grained, soft density – and helping to explain why compact rear-access lots are becoming increasingly viable in established suburbs.
Under offer: This fully gated 304m2 block is located in the heart of Scarborough. Image: realestate.com.au/sold
Once the domain of Melbourne’s cool inner suburbs, Perth’s revitalization has reimagined the lanes as part of the urban fabric of the City of Light.
But despite the buzz, housing on Perth’s streets won’t single-handedly solve Perth’s supply shortage.
“There are restrictions on where they can be built due to zoning regulations and the scale at which they can be delivered is much smaller than typical residential developments,” Ms Lieu said.
“While it could introduce some supply into approved areas, the overall impact on housing availability could be quite limited.”
The median home price in Scarborough is $1.31 million, according to PropTrack. Image: realestate.com.au/sold
The half-acre block may still tug at the heartstrings of many, but for a growing cohort, a tucked-away address offers something just as appealing: tranquility, proximity and a unique sense of place – with a smaller, more sustainable footprint.
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