Seaward not part of inquiry

However, residents' comments may not be included in the report by the Parliamentary Standing Committee on Public Works, which will hold hearings in August in Perth.

"The village is not in the scope of this inquiry, but when we send notice of the public hearings we can hear their views," Sen Smith said.

Defence Housing Australia (DHA) may spend about $165 million demolishing 154 soldiers' homes on the 22ha village, using half the site for civilian homes and the remainder for 165 new defence houses.

However, in 2014 DHA was exempted from the committee, which examines Federal Government projects worth more than $15 million. Critics of redeveloping the village cite the committee's recommendation after it examined the replacement of 77 prefabricated homes at the village in 1991.

"For operational and social reasons deriving from the responsibilities of the Special Air Service Regiment (SASR) there is no scope for the Defence Housing Authority to develop Seaward Village as an estate containing a mixture of civilian and defence housing," the committee said.

Asked about the recommendation, Sen Smith said his committee could deal only with issues sent to it by Parliament and his inquiry would look at replacing aging buildings from mid-2016 to 2018 at the barracks, where the SASR had grown from about 350 soldiers to more than 700.

Australian SAS Association chairman Terry Nolan said he believed the inquiry and a Department of Defence security review of the village's redevelopment due today would stop the civilian housing proposal.

Mr Nolan said Sen Smith should consider the still current 1991 covenant over the land that secured long-term SAS tenure at Campbell Barracks. He said villagers needed "peace of mind and security".

"If land is sold for civilian housing in Seaward Village it must seriously question the long term viability of the area for a strategic army-ADF base and put at risk unnecessarily the security and peace of mind of military families in the village," he said.