Listings for new land in Perth have fallen to a seven year low.
A survey by the Urban Development Institute of Australia found the level of stock on the market has decreased by 45 per cent over the past year.
The institute's Debra Goostrey says an increase in the number of first home buyers and low interest rates have caused the reduction in stock.
However she says the number of lots being released onto the market is expected to grow by six per cent before the end of the year.
"There's no real cause for concern. Developers are responding, they are intending to release even more land to cope with the demand that's coming through at the moment," she said.