A protest at a controversial housing development at Golden Bay, south of Perth, has turned ugly with vandals causing significant damage by setting fire to heavy earthmoving equipment.

Firefighters were called to a site near Figtree Lane late last night after receiving reports several pieces of machinery had been vandalised.

This morning a number of workers arrived at the site only to be told their equipment was damaged, possibly beyond repair.

Protesters in front of the sand dunes in Golden Bay on Wednesday. ( Supplied: Adam Bell )

Workers abused: contractor

Contractor Shane Wormall said his staff had been abused and threatened by protestors who threw rocks and sticks and kicked vehicles as they entered and left the site.

"These protestors have obviously come out and made claims through social media … that they are peaceful, … it would be great if they stayed more peaceful, " he said.

"I understand they want to have their voice heard but there is an appropriate way to go about it, without going and damaging things, abusing people and threatening people."

Mr Wormall estimated the damage bill could be as high as $500,000.

A police presence remains on the site of the development. ( ABC News: Rebecca Trigger )

A handful of tearful protesters on the site this morning denied any knowledge of the vandalism.

Work continues on the development this morning as a police presence remains on site.

Development divides community

Residents have been protesting at the site, 60 kilometres south of Perth, in recent weeks as the bulldozers moved in to begin levelling the sand dunes for the development of 88 housing lots.

They argued the development would remove vital sand dunes and have a devastating impact on wildlife.

A local resident who organised a petition against the housing development, Adam Bell, said he was devastated by reports of the vandalism.

Protestors say the sand dunes will be levelled by developers. ( Supplied: Adam Bell )

Mr Bell said riot police turned up to a peaceful rally of 80 people at the site yesterday.

He said the vandalism was counterproductive.

"This has just put a spanner in the works," he said.

"This is 10 steps backwards. It seems like all the hard work [was] for nothing now. I was literally heartbroken."

Mr Bell said the 40-hectare estate was home to kangaroos, bandicoots, snakes, lizards and other wildlife, which would be driven out of the area as it was the last of the natural vegetation in Golden Bay.

Plea for calm

Mayor of Rockingham Barry Sammels said he was shocked by the overnight developments and urged residents to calm down.

He warned those responsible for the damage could face a jail sentence.

"I want to tell the residents please settle down and don't get involved in any criminal damage or illegal protesting," he said.

"If people want to protest please abide by the laws."

Mr Sammels said tensions at the site had been simmering for some time and police had been called to the site on at least one occasion in recent weeks.

"The council, I think back in 2011, didn't support the process, but the WAPC [West Australian Planning Commission] wanted to proceed with the development," he said.

"I know the locals down there are very passionate about those dunes and didn't want to see that development take place, but we don't encourage anyone to get involved in this type of criminal damage."

Premier Mark McGowan described the actions of those who set machinery on fire as "totally inappropriate".

"I understand people are concerned ... but people shouldn't set vehicles on fire," he said.

"This was an issue decided before we came to office, we really can't change what has been decided."