Water Corp has "sincerely apologised" to everyone affected.
"Water Corporation crews are working to repair a damaged water main on Centro Ave, Subiaco which caused a parked vehicle to become submerged in a sinkhole," a Water Corp spokesperson told news.com.au.
"Crews have been working throughout the evening and morning to effect repairs and works will continue today to ensure the road is safe to reopen.
WA Police taped off the area around the car to avoid public interference.
There were an estimated 60 homes and businesses surrounding the sinkhole that were left without water temporarily.
"There are three properties without water and bottled water is available onsite for those who need it. Traffic management is onsite and road diversions are in place. Motorists are asked to please show caution in the area," a Water Corp spokesperson said.