Developers face hike in costs as Yanchep and Two Rocks developments slow

Developers face hike in costs as Yanchep and Two Rocks developments slow

DEVELOPMENT is slowing in Yanchep and Two Rocks, meaning developers could have to pay an extra $2780 per dwelling for the developer contribution plan (DCP).

The City of Wanneroo will invite submissions from affected major landowners after the council noted the annual review of the 10-year funding plan for community facilities, including the playing fields and surf life saving club.

According to the August 16 report to the council, there are more development projects in Yanchep and Two Rocks but likely to be fewer lots released in those 10 years.

“The Yanchep/Two Rocks region is fast maturing in terms of the number of projects operating in the area,” the report said.

“While two to three years ago, development only consisted of three projects (Capricorn, Jindowie and Yanchep Golf), there are now seven active projects in the region contributing to lot creation.

“This increase in the number of projects adds considerable marketing spend and therefore critical mass to the region in terms of increasing overall market share of demand compared to two to three years ago.

“This means that historical trends of market share are not reliable to forecast the future demand or lot creation.

“The total number of new dwellings to be developed within the 10-year DCP is estimated to decrease – 10,603 in 2015 compared to 7134 in 2016.

“This reduction in dwelling yield is acknowledged as being due to a slowdown in the housing market.

“The original projections provided by the landowner group cannot realistically be achieved in the 10-year DCP timeframe.

“It is necessary to acknowledge a reduced total dwelling yield and the associated increase in the cost contribution amount.”

The report said the total estimated cost of the community facilities, which also include Capricorn coastal node facilities, had decreased by $1.1 million since the 2015 review.

“This is primarily due to a significantly cheaper land valuation for the Yanchep district open space facility and competitive tender prices for facility construction,” it said.

“It is important to note that although the estimated land value may be cheaper at this point in time, the land is scheduled to be formally acquired in year five of the DCP (2018-19) – therefore the land value may increase again before this time if the market improves.”

The report proposed increasing the current rate of developer contributions from $2070 per dwelling to $2780 per dwelling.

“The most significant financial implication arising from the DCP review is the need to loan funds to meet the DCP contribution towards the construction of the facilities,” it said.

“This is mainly due to the early delivery of the surf life saving club and district open space facilities, and is exacerbated by the reduced DCP income received.”

The council noted the report without discussion on August 16, and agreed to notify landowners of the proposed increase, giving them 28 days to provide written comments.