First-homebuyers are expected to help drive a mini-boom in new homes in the next year as they increasingly find it more affordable to build than pay Perth's rocketing rents.
The Housing Industry Forecasting Group, a joint government and industry body, predicts 21,000 new homes will be built in WA this financial year - a jump of 20 per cent - fuelled by high rents, strong population growth and a growing first-home market.
The median rent in Perth rose 14 per cent over the year to $450 a week, so householders need an income of $1500 a week, or $78,000 a year, to comfortably afford to lease a property, according to the group's annual forecast.
HIFG chairman Stewart Darby predicted continued pressure on rents until 2014 because the vacancy rate - currently 1.8 per cent - was below the 3 per cent equilibrium.
"What we are seeing is that rents are pushing up, forcing people to make a decision on whether to build a new home or buy an established property," Mr Darby said.
"High rents are tipping the scale in favour of buying homes."
In recent months the entry buyers have taken on more than a third of all new mortgages, compared with the traditional average of 27 per cent.
Mr Darby said the expected jump in new dwellings would also come from strong population growth from more than 1000 interstate and overseas arrivals each week.
Interest would also be driven by pent-up demand after a 30 per cent drop in the volume of properties on the market over the past year and sluggish construction in 2011-12.
He said 2012-13 would kick off the recovery in the residential building sector.
The report also said there were signs of life in the established housing market, with a 40 per cent jump in the ratio of property sales to listings.
However, the positive trends were unlikely to affect house prices in the year ahead. The Real Estate Institute of WA predicts prices will be stagnant or grow at the inflation rate.
First-homebuyers Gemma Boys and Johnny Belkus-Blair said high rents were a big factor in their decision to buy a house and land package.
Their $400 weekly mortgage on their Whiteman Edge home, bought through the WA Housing Centre, was only marginally higher than their $340 contribution for their Bassendean share-house."We want to stop paying off someone else's mortgage," Ms Boys said.