Nearby residents said a man who lives at the home was arrested after armed officers swarmed the property about 7.30am, yelling warnings at those inside.
One neighbour saw the man, who is aged about 50, come to the door with his hands on his head as the officers moved in.
It is understood he and his daughter have lived in the home for several years.
His daughter, a young adult, turned up at the property about an hour after police and spent some time talking to them before she was also escorted away.
Police have cordoned off the home as a crime scene and have been concentrating on an area in the backyard where they have set up a forensic tent.
The West Australian said that the man taken into custody yesterday had not previously been publicly linked to the case, which has captivated Perth for two decades.
It is believed to have been the most expensive inquiry ever conducted by WA Police who indicated in January this year that they remained confident that an arrest was possible.
Sarah Spiers, 18, Jane Rimmer, 23, and Ciara Glennon, 27, were abducted off the streets of Claremont between January 1996 and March 1997.
Both Jane and Ciara's body's were later found, but the whereabouts of Sarah's body remains a mystery.
Nearby resident Jim Sheffield said police had not told them anything about what was happening.
He said he first saw all the heavily armed police when he came out the front of his home about 7.30am.
But he had heard a "real loud yell" and what sounded like a scream about 6.30am while he was gardening in the backyard.
Claremont murders
February 1, 1995: Teenage girl, 17, abducted after leaving Club Bayview in Claremont and raped in a nearby cemetery. She survives. Rapist not caught
January 27, 1996: Sarah Spiers, 18, vanishes after leaving Club Bayview.
June 6, 1996: Jane Rimmer, 23, disappears in similar circumstances to Spiers. She was last seen outside the Continental Hotel in Claremont.
June 10, 1996: WA Police set up Macro taskforce to investigate the two disappearances.
August 3, 1996: Rimmer's body discovered south of Perth
March 15, 1997: Ciara Glennon, 27, leaves Continental Hotel and is sighted once more before vanishing.
April 3, 1997: Glennon's body found in bush north of Perth.
October 16, 2015: Police reportedly link Ciara Glennon's murder to cemetery rape in 1995.
