The independent report comes as the city and metropolis are about to explode in unit and apartment development over the next few years.
The study, The Housing We'd Choose: A Study for Perth and Peel, surveyed more than 1000 people over six months about what matters most for them in terms of housing and found 79 per cent still want the "white picket fence'' option.
Jointly commissioned by the Departments of Housing and Planning to determine if there is a difference between housing preferences (demand) and what is being built or planned (supply), the report shows the free-standing brick house is still the big favourite.
Department of Housing director-general Grahame Searle said that while most respondents still favoured owning a separate house, they were prepared to make significant trade-offs in location, house type and size to realise their dreams of owning a home.
And in one mismatch between supply and demand, it also found that while 35 per cent of people would choose semi-detached housing as an option, just 12 per cent of Perth's current housing stock is semi-detached.
"This report reveals the enduring aspirations of many Western Australians to own a home, and their willingness to make concessions in order to afford it,'' Mr Searle said.
Affordability is still the biggest determinant in the property scenario, the study shows, underlining the importance of government assistance.
However when it comes to location, Department of Planning director general Eric Lumsden said a key finding showed a strong preference for people to live in the inner regions with easy access to work.
"The study is an important snapshot, which shows that the combination of affordability pressures and desire to live in well-connected locations is driving an evolution in housing,'' Mr Lumsden said.
"We expect to see these evolve further in coming years, as the ageing population and other demographic shifts drive housing demand in the Perth-Peel region.''
The outcomes from the survey support findings from a similar study of Melbourne and Sydney residents performed in 2011 by policy think tank, the Grattan Institute.
The Perth report outlines challenges and opportunities for government, industry sectors, and the local community moving forward to supply the type of housing that people want and can afford.
* Affordability plays a major role in shaping peoples housing choices, often requiring them to make trade-offs between the house they would prefer and the one they eventually choose.
* 98 per cent of people surveyed prefer owner occupation rather than renting.
* 88 per cent of people said building materials were important to them when choosing a home. Of these, more than 50 per cent of these people wanted double brick, however over 25 per cent wanted homes made of alternative materials, suggesting that there may be growing demand for different construction types, if they can be delivered at an affordable price.
* Easy access to (not necessarily close proximity to) work was regarded as very important to most people. People were happier to have smaller properties if it meant that they could live in their preferred location.
* There was a strong preference to live in the inner and coastal regions, with two-thirds of people preferring these locations. However only half of respondents were able to choose these locations when constrained by household budget.
* 44 per cent of people indicated that a three bedroom house is the smallest property that they were prepared to purchase, which increased to 46 per cent when affordability and location were taken into consideration.
* When constrained by affordability, only 15 per cent of people said a four-bedroom dwelling was their minimum requirement and only 8 per cent chose a five bedroom house.
* People were more willing to trade-off house type than the number of bedrooms. This suggests that there is likely to be demand for smaller dwellings (eg townhouses, semi-detached homes or apartments) that can be delivered with the right number of bedrooms, in the right locations.
* Majority of people preferred to live in a separate house (79 per cent) if there were no location or affordability constraints. When constrained by location and affordability, this number dropped to 56 per cent.
* Apartments were the least popular housing option (chosen by fewer than 10 per cent of those surveyed), although many of the concerns raised relate to apartment design such as noise transmission. However, people were far more prepared to rent an apartment rather than being long term owner occupiers.
* The findings of the report indicated that 35 per cent of people would choose semi-detached housing when considering location and affordability factors. Just 12 per cent of Perth's current housing stock is semi-detached, suggesting that there is considerable unmet demand for this type of housing.