The Royal Agricultural Society says it will not consider leaving the Claremont Showgrounds, despite calls from the local mayor to do so.
The mayor Jock Barker is calling on the State Government to start talks with the society over the future of the showgrounds.
About a million people visit the showgrounds each year, half of them during show week.
Mr Barker says that is not the best use of the 30 hectare site, and wants the RAS to consider redeveloping the land for housing to ease pressures created by the state's rapid population growth.
He has told the ABC the showgrounds are vacant about 95 per cent of the year and could be better used to meet infill housing targets.
"We need urban infill to slow down the urban spread," he said.
Mr Barker says he does not necessarily want to see the Royal Show moved but such a large area could be used better.
"I'm simply saying that it's incumbent upon the government and the RAS to look at the future of the grounds," he said.
"And, if they don't look at the future of them, and the potential to move it, they're not doing the right thing for the WA community."
The Royal Agricultural Society says it has no plans to relocate but will consider redeveloping part of the 30 hectare site.
He says the land belongs to the society.
"We don't want politicians or people saying that you have to sell."
Mr Molony says the site is probably too large for the show but politicians cannot force it to move.
"I think we have to probably look at a couple of hectares of land to maybe do what the Mayor of Claremont suggested and maybe have infill housing or whatever," he said.
"And, that would help us financially to maintain it."
Mr Barker says he is not proposing to shut down the show.
"I certainly don't want the Royal Show shut down," he said.
"What I'm saying is that at the present time in Western Australia, there's huge growth and it needs big thinking."