Unreinforced masonry (URM) constructions are vulnerable to seismic loading due to their high mass and stiffness and low ductility and tensile strength. It is important to be able to predict the seismic resistance and the governing failure modes of URM walls and components in order to evaluate the seismic hazard for existing URM structures. If local out-of-plane failure mechanisms are restrained via suitable detailing, the capacity against collapse under seismic loading for URM buildings is typically limited to the in-plane shear capacity of the URM walls. To investigate the in-plane response of URM walls under earthquake loading, the in-plane shear behaviour of full-scale perforated URM walls with an arched opening was simulated using nonlinear Finite Element (FE) analyses. The study considered the influence of the wall geometry by varying the spandrel depths and the level of precompression stresses were varied to represent different positions of the wall within a multistorey building. Both macro-modelling (total strain fixed crack) and simplified micromodelling (crack-shear-crush) approaches were used to analyse the wall behaviour. The shear capacities and the failure modes of the walls obtained from the FE analyses were compared to the predicted horizontal shear strength capacity and governing failure mode for URM walls/piers proposed by New Zealand Society for Earthquake Engineering (NZSEE).