Six unfinished townhouses have been torn down in a costly and cruel blow for taxpayers during a housing crisis.

The homes in Hamilton Hill, Perth, were part of state government agency DevelopmentWA’s OneOneFive project, and were being built by Inspired Homes for the open market.

WATCH THE VIDEO ABOVE: Million-dollar housing project demolished in Hamilton Hill

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Inspired went into voluntary administration in April 2025, leaving the properties incomplete and empty for more than a year.

“It was sad. It was almost like having sort of ghost houses over the road,” local Jean McKay told 7NEWS.

“They’ve just been sitting there and so it’s been quite distressing seeing the houses and no further work progressing on them.”

A new builder deemed that they needed to be demolished, with taxpayers now burdened with an even bigger bill in what has become a $5 million mess.

More than $1 million has already been spent on the six townhouses and it is costing another $150,000 to knock them down.

It will cost another $4 million to rebuild, and none are slated for social or affordable housing.

“It’s wasteful, it’s destructive and in the middle of a housing crisis, frankly, it’s unacceptable,” WA Greens leader Brad Pettitt said.

Homes at DevelopmentWA's OneOneFive precinct will be torn down and rebuilt. Credit: 7NEWS

Homes at DevelopmentWA's OneOneFive precinct will be torn down and rebuilt. Credit: 7NEWS

The demolition has been going on for days, with the rubble of what should have been family homes trucked out to become landfill.

Housing Minister John Carey said DevelopmentWA is seeking to recuperate costs from the original builder.

Opposition housing spokesperson Sandra Brewer told 7NEWS the government needs to “reconsider their role in the market” and “provide capacity” so residential builders can fulfill the demand for homes that are needed.

A new builder is expected to complete the rebuild by late 2027.