Recent analysis shows Perth’s median weekly rent rose to about $740 by December 2024. A roughly $320 increase since 2020. In 2024 rents jumped around 14% and the state also faces a shortfall in rental stock driven by strong population gains. Source: BCEC

Against this backdrop, modular (factory-built) housing is gaining attention as a practical supply-side response. Here’s a balanced view of the key advantages and limitations.

1. Faster delivery, lower onsite disruption
Because major components are built offsite in controlled factory conditions, modular homes can cut construction time significantly versus traditional builds. This is crucial when speed matters to house workers and families. This efficiency can reduce holding costs for builders and shorten lead times for buyers or rental providers.

2. Predictability and quality control
Factory production improves consistency and reduces weather-related delays and defects. For organisations delivering medium-scale projects, such as affordable housing providers, local governments or large developers, modular methods can tighten budgets and timelines.

3. Scalability for targeted needs
Modular construction suits rapid delivery of worker accommodation, social housing, and infill developments. With WA completing a higher number of homes recently (20,639 completions in 2024), modular methods can help sustain that momentum where labour and site constraints exist. Source: Western Australian Government 

4. Reduced waste and sustainability gains
Repeatable factory processes generate less material waste and can integrate energy-efficient components more easily, appealing to buyers and regulators focused on long-term running costs.

1. Upfront capital and financing hurdles
Although lifecycle costs can be attractive, modular projects often require specialised factories, logistics and upfront investment. Smaller builders and many strata-style financings still favour conventional construction, which can limit adoption.

2. Perception and planning barriers
Modular homes sometimes face stigma about quality or resale value, and local planning controls or utility connections aren’t always optimised for modular delivery. Overcoming these hurdles requires buyer education and regulatory alignment.

3. Site and supply-chain constraints
Transporting large modules to inner-city or constrained suburban sites can be complex and costly. Likewise, modular factories rely on steady component supply chains.

Perth’s vacancy rates have started to normalise, reaching around 2.5% in March 2025. At the same time affordable rental shortages and sharp rent rises remain systemic issues. Modular housing won’t solve supply gaps on its own, but it’s a scalable tool that can speed delivery, improve cost certainty and target the types of dwellings most in shortage. Strategic public–private partnerships, incentives for factory investment, and planning reforms would amplify the benefits. Source: REIWA Public Website