Developer AVJennings pulls pin on plans for 3500 Caboolture West homes, soaring costs blamed

A Queensland council has launched a broadside at the state government after a major developer announced it will no longer go ahead with 3500 housing lots at a SEQ satellite city, equivalent to about 10 per cent of the entire project.

Developer AVJennings has announced it will drop plans for 3500 affordable housing lots at the Caboolture West satellite city, which would have been home to about 10 per cent of the city’s forecast 70,000 population.

The company told the ASX on Wednesday morning that increases in future sales revenue were not enough to offset soaring infrastructure and development costs.

It decided not to exercise an option, due this month, to extend its rights to develop the lots and would take a hit of $17.2 million by pulling out.

AVJennings was expected to begin work at “Rocksberg’’ towards the end of this year.

It had not yet been given approval by council and no sales had been made or deposits taken.

Only last week company chief executive Phil Kearns spoke out, saying $200,000 of the cost of a new home was tied up in fees and charges across all three levels of government.

“At this rate, it is taking at least seven years for a developer to see a return on investment,’’ he said.

Stockland, which last year became the first developer at Caboolture West to be granted Council approval, declined to comment.

City of Moreton mayor Peter Flannery has told the state government to get serious about housing supply. Picture: John Gass

While there was no word yet on whether other major developers would follow suit, City of Moreton Mayor Peter Flannery said the land would be quickly “snapped up’’ and the landowner was committed to developing it.

AVJennings’ decision has sparked a war of words between Mr Flannery and the State Government over funding for critical infrastructure.

Mr Flannery said it was a “timely reminder to the State Government to start getting serious about the housing crisis’’.

“There is no doubt that infrastructure and development costs have increased – we’re seeing that across the board,” he said.

“However, we will not meet State Government-mandated housing targets if a pipeline of catalytic infrastructure is not prioritised now.

“The fact of the matter is land can’t be turned into housing without infrastructure.

“It’s all well and good for the state to mandate growth targets for councils but they need to support that growth.”

He called on the state to at least speed up funding for the Bruce Highway Western Alternative and Buchanan Rd projects to service Caboolture West, also known as Waraba.

“With councils only receiving 3 per cent of tax revenue, it is up to the state and federal governments to make a real contribution to infrastructure,’’ he said.

A Local Government Department spokesman said AV Jennings was only one of numerous builders working in Caboolture West.

“While we are disappointed by the decisions, we are advised the landowner will progress all current development applications with the Moreton Bay Regional Council,” he said.

The government said 12 southeast councils would benefit from its second, $100 million round

of funding under the Community Stimulus Program.

The program aims to fast-track investment in critical infrastructure and community assets to prepare sites for future housing development.

Local Government Minister Meaghan Scanlon. Picture: Richard Gosling

Housing Minister Meaghan Scanlon said the Miles Government was investing $89 billion over the next four years for its infrastructure Big Build.

“We’ve deployed more than $366 million to councils and industry to fuel residential expansion and bolster community infrastructure,” she said.

“As part of our Homes for Queenslanders plan, we also announced a $350 million infill development fund to encourage more homes in the right places.

“The LNP when David Crisafulli was Local Government Minister slashed funding for Queensland councils – and he didn’t have any regrets about it.

“Funding for councils is all at risk under David Crisafulli and the LNP who have already said they’ve got a list of billions of dollars’ worth of cuts and won’t support coal royalties.

“We need transparency from local governments to understand their spending on trunk infrastructure, funding sources, and the proportion covered by infrastructure charges.

“Transparency from local governments will enable the government to consider policies that align with the realities of infrastructure development, promote fairness, and contribute to the overall housing supply, diversity and affordability.”

Property Council executive director Jess Caire said the AVJennings announcement was “unfortunate news’’ and a “timely reminder that bringing new homes to market has never been more costly or challenging”.

“Unfortunately, without a concerted aligned effort from all levels of Government, this situation is likely to get worse before it gets better,” she said.

In February the Local Government Association of Queensland demanded the government pump an extra $500 million into infrastructure to help them achieve the ambitious target of one million new homes by 2046.

The addition of cars to the already congested Bruce Highway between Caboolture and Brisbane has been raised by Moreton councillors.

The LGAQ said its 77 councils were frustrated the maximum charge that could be levied on developers for trunk infrastructure – water, roads and sewerage – “has not kept pace with increasing construction costs”.

Waraba will eventually become home to a city the size of Mackay with 70,000 residents.

AVID Property Group, Baycrown Property Group, Lennium Group and Orchard Property Group have already started work on the first precinct, the new suburb of Lilywood.

It would feature turnkey homes and affordable house and land packages on blocks ranging from 300-600 sqm.

The first neighbourhood display village was due to open in mid-2025.