Why these tiny blocks are hot property

Perth’s housing market is tight, and buyers are getting creative. One trend gaining traction is the unassuming laneway block: compact sites tucked behind established streets that offer a unique path into well-located suburbs.

With total listings across Perth lower than last year and properties selling faster, it’s no surprise these smaller parcels are drawing interest.

The shift isn’t coming out of nowhere. WA’s long-running Liveable Neighbourhoods policy encouraged walkable, fine-grained development and greater diversity in lot sizes; pair that with renewed demand and a shortage of available stock, and you get more appetite for compact blocks close to amenities.

Across suburbs like Scarborough, North Perth and Mount Lawley, homes built off quiet lanes are proving irresistible to downsizers, investors and first-home buyers chasing affordability without sacrificing location.

In beachside Scarborough, an unassuming 216-square-metre block on Motteram Lane, described as the “first and only block with dedicated Motteram Lane mailing & services address” is one of several laneway houses to recently go under offer.

Listing agent Giovanni Notte says the sale reflects a clear shift in buyer priorities.

“It was the first of its kind in the council region, and we’re seeing more subdivisions like it coming through the inner suburbs,” Mr Notte said.

“Councils are getting on board. What we saw with the Scarborough laneway property is people are happy with smaller, more compact living. These properties are low-maintenance and tucked away, which adds a real charm.”

Perth’s housing market remains one of the nation’s tightest, with home prices growing at the second fastest annual rate of all the capital cities, behind Brisbane.

REA Group economic analyst Megan Lieu says that while price growth has slowed in recent months and demand has eased, market activity is still high.

“The shortfall in new home completions, relative to population growth in Western Australia, is around 20%,” Ms Lieu said, “further contributing to supply pressures in the market.”

As a result, buyers are turning to unconventional pockets of land, including laneways, as creative alternatives to traditional blocks.

“Laneway homes make use of under-utilised spaces,” Ms Lieu said. “They are usually found in metro areas, close to amenities and public transport. They encourage more productive use of land and have good lifestyle elements.”

‘Hidden gems’ in high demand

For agent Nadija Begovich of The Perth Property Co., the demand for turnkey ‘lock-up and leave’ laneway 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.

In Mount Lawley, after only days on the market, this contemporary near new 1 bedroom unit at 131A West Parade is under offer and drew strong interest from first-home buyers.

One of three on the block, Ms Begovich said the “1 x 1 x 1 unit is such a great example of what you can build off a laneway.”

“I wish I had four more of these because there were so many buyers that missed out! Not only is liveability great, it also has strong rental potential.”

Further north, a three-bedroom home on Sholl Lane was “snapped up super quick,” said Ms Begovich, “another great example of what you can do with a lot that has access to a lane way.”

As a historical touchstone, ‘Dulce House’, a two-storey home that sold for $1,200,000 in 2021 and shows the laneway appeal at the architectural end of the market.   

Beyond price and location, laneway homes offer a lock-up-and-leave lifestyle that feels both connected and contained. With no through-traffic, they’re quieter, more neighbourly and offer a good mix of convenience and calm – like little secret worlds behind the main street.

In coastal suburbs like Scarborough, they even promise ocean glimpses from compact sites, proving that size isn’t everything.

A Small but Mighty Trend

Perth’s laneway moment didn’t appear out of nowhere. The concept has been quietly incubating since the early 2000s under the Government’s Liveable Neighbourhoods policy and by the City of Perth’s “Forgotten Spaces” strategy – best known for transforming gritty laneways like Wolf Lane into vibrant public destinations.  

Together, these initiatives have reframed the laneways of Perth from back-of-house service routes to valued public and residential spaces, laying the groundwork for fine-grained, gentle density – and helping explain why compact, rear-access lots are increasingly viable in established suburbs.

Once the domain of Melbourne’s cool inner suburbs, Perth’s laneway revitalisation has reimagined lanes as part of the City of Light’s urban fabric.

But despite the buzz, laneway housing won’t single-handedly solve Perth’s supply shortage.

“There are limitations in where they can be built due to zoning laws and also the scale at which they can be delivered is much smaller than typical residential developments,” said Ms Lieu.

“While it could introduce some supply in approved areas, the overall impact on housing availability may be quite limited.”

The quarter-acre block may still tug at the hearts of many, but for a growing cohort, a tucked-away laneway address offers something just as compelling: peace, proximity and a unique sense of place – with a smaller, more sustainable footprint.

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