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NSW Department of Planning, Industry and Environment
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Providing housing choice to meet the community’s needs into the future, in locations that can sustain housing is a key objective of the Plan.


The region will need at least 35,400 new homes between 2016 and 2036 to meet the demands of population growth and change – this is an average of 1,770 each year. With one in four residents aged 65 years or older, and more one- and two-person households, decisions about the types of housing available, and the locations of new housing, as well as the environmental impact of development, are all important.


During 2014, housing supply in the region totalled 1,675. In the Wollongong, Shellharbour and Kiama Local Government Areas, the average housing supply over the past 10 years has been almost 1,100 dwellings. This has ranged from a maximum of 1,442 in 2004 to a minimum of 583 in 2010. Housing completions have increased in each of the past three years. In the Shoalhaven, average annual housing supply over the period from 2010-2014 was 400.


The Plan aims to create sufficient housing supply to allow the region to meet the market’s demand for new housing. The timely delivery of infrastructure and investment, as well as enabling planning controls, will be pivotal to achieving this objective. 

Evidence from the Urban Feasibility Model, Illawarra Urban Development Program and Shoalhaven Growth Management Strategy show there is enough potential for the market to supply housing across a range of locations and housing types for the long term. Therefore, no new release areas are required for Wollongong, Shellharbour and Shoalhaven beyond those already identified under the Illawarra Urban Development Program and Shoalhaven Growth Management Strategy. In Kiama, the need for an additional greenfield land release to accommodate growth will have to be determined.

The combined demands from tourism and the nature of the housing market, particularly in coastal towns, may require new housing development. These opportunities will be considered as part of the strategic assessment about where future development should be located.


Councils are to plan for the mix of housing that suits the projected growth, changing demographics (such as an ageing population) and market demand particular to their area. This means that zonings and planning controls maintain, or in some cases, increase capacity for housing, as well as other Council activities (such as streamlining assessment processes and planning for local infrastructure and town centre revitalisation) to promote development opportunities.


Projected housing needed by Local Government Area 2016-18 
Local government area Projected housing need
Wollongong 14,600
Shellharbour 9,350
Kiama 2,850
Shoalhaven 8,600


ACTION 2.1.1: Collaborate with Kiama Municipal Council to review housing opportunities within the Kiama Local Government Area so it can respond to changing housing needs

Kiama and its hinterland sit between the more urbanised parts of Shellharbour and Wollongong and the more rural Shoalhaven. Kiama should be able to accommodate 2,850 new homes up to 2036, to meet expectations for greater housing choice. However, analysis indicates that there is not enough land or ‘market ready’ infill development in the planning pipeline to meet this demand, and this may constrain the mix of housing available to first-home buyers, young families and retirees, and to people who want to age in their homes. 


The NSW Government will:

  • work with Kiama Municipal Council to monitor and review the potential of the area to accommodate housing demand. 


Housing stress occurs when lower-income households spend more than 30 per cent of their income on rent or mortgage costs. Based on 2011 Australian Bureau of Statistics data, 27 per cent of all households in the region are experiencing housing stress, while 35 per cent of households on moderate, low and very low incomes are experiencing housing stress.


There is strong demand in the region for housing for rent or purchase by lower-income residents, students, single-person households and seniors. This is coupled with a lack of one-, two- and three-bedroom homes, due to an increase in the number of larger four-bedroom homes.


The NSW Government aims to develop a comprehensive approach to this issue that involves all stakeholders – the Government, local Councils, and the private and community sectors. 


The NSW Land and Housing Corporation is currently reviewing public housing estates across NSW. The Regional Plan will provide input about the affordability issues relevant to this region.

Making more housing available in existing urban areas is a sustainable option because it takes advantage of existing job markets, infrastructure, commercial and retail opportunities, public transport, and facilities for pedestrians and cyclists.


Centres identified as the focus for increased housing activity (see Wollongong and surrounds map below) include the:

  • Northern corridor – Thirroul, Corrimal and Fairy Meadow;
  • West Lake Illawarra corridor – Figtree, Unanderra, Dapto and Oak Flats;
  • East Lake Illawarra corridor – Warrawong, Warilla and Shellharbour Centre;
  • Metro Wollongong; and
  • Southern centres – Kiama, Gerringong, Berry, Nowra-Bomaderry, Huskisson and Ulladulla.


An analysis of current planning controls in the region shows capacity for 24,100 new homes in existing urban areas, based on current market conditions, including:

  • villas, townhouses and other multi-unit dwellings in Thirroul, Bulli, Fairy Meadow, Metro Wollongong (West Wollongong) and Kiama;
  • apartments in Metro Wollongong and to a lesser extent in Kiama; and
  • dual occupancies in Huskisson and Berry.


Opportunities for new housing and urban revitalisation exist across the region although the demand for multi-unit housing is uneven. A place-based planning approach will be adopted to consider these opportunities for centres that have access to transport. This is covered in more detail in Goal 3.


Illawarra - Shoalhaven's key housing locations map

Click to enlarge.

Map showing key housing locations in the Illawarra-Shoalhaven region


Wollongong and surrounds map

Click to enlarge.

Map of Wollongong surrounds



ACTION 2.2.1: Investigate the policies, plans and investments that would support greater housing diversity in centres

Analysis has identified locations in centres such as Thirroul, Corrimal, Oak Flats, Kiama, Gerringong and Nowra-Bomaderry where a wider range of housing options are feasible, and where changes to planning controls could facilitate this outcome. As indicated in Goal1, Metro Wollongong has potential for higher density apartments, as well as housing suitable for students, health workers and seniors.


Additional residential development in these locations could also act as a catalyst to enhance their existing recreational and environmental features.


The NSW Government will:

  • investigate any barriers that may be preventing development by:
    • exploring the types of infrastructure and public domain investments that would increase the capacity for growth;
    • identifying policies and more detailed planning that would improve certainty and streamline development processes; and
    • identifying urban design outcomes that support active and vital communities once development occurs; and
  • work with Councils to review planning controls in existing urban areas to identify opportunities to increase the range of housing types.


The major regional release areas of West Lake Illawarra and Nowra-Bomaderry will continue to be the long term focus for greenfield housing in the region. Other established and smaller release areas will add to the diversity of supply such as Shell Cove, Tullimbar, Haywards Bay, South Kiama, West Culburra, Vincentia, Sussex Inlet, Manyana and Milton-Ulladulla.


West Lake Illawarra and Nowra-Bomaderry alone have a combined capacity of 37,600 lots, representing a 30 to 40 year supply of housing. This means that Wollongong, Shellharbour and Shoalhaven Councils have the capacity to meet their projected housing needs for greenfield land supply well beyond 2036.


Of the 37,600-lot capacity in West Lake Illawarra and Nowra-Bomaderry release areas, 19,200 have now been zoned for development:

  • the initial stages of West Dapto, with capacity for 6,900 lots (rezoned in 2010);
  • a majority of Calderwood, with capacity for 4,800 lots (rezoned in 2010);
  • the Tallawarra site, with capacity for 1,000 lots (rezoned in 2010); and
  • six precincts in Nowra-Bomaderry, with capacity for 6,400 lots (rezoned in 2014).


Since the 10-year low of 218 dwellings in 2009-10, there were three consecutive increases in annual greenfield housing production to 2013-14. Seven neighbourhood plans have now been endorsed in West Dapto with approval for 2,250 housing lots, with 1,140 lots under construction.


Urban design principles that support sustainability and liveability will be embedded into the design of subdivisions in new release areas. The land use planning process will identify and protect natural corridors and waterways; provide walking and cycling paths; and offer diverse housing types focused around local centres.


The NSW Government will continue to:

  • work with Councils to resolve development impediments and focus on infrastructure coordination in new release areas at West Dapto and Nowra-Bomaderry.



ACTION 2.3.1: Coordinate infrastructure delivery to support West Lake Illawarra and Nowra-Bomaderry release areas

Councils, infrastructure agencies and utility providers will continue to identify the strategic infrastructure investments needed to support housing delivery at West Lake Illawarra and Nowra-Bomaderry.


Having identified the overall infrastructure needs to support growth of the new release areas, the priority for State agencies and other key stakeholders is to focus on coordinating new infrastructure to achieve development outcomes in the short to medium term.


The NSW Government will:

  • coordinate delivery of infrastructure required to support West Lake Illawarra and Nowra-Bomaderry release areas.


Protecting terrestrial biodiversity assets is important, particularly in new release areas such as West Lake Illawarra and Nowra-Bomaderry but also in other development areas that may arise over time. Understanding the general degree of biodiversity loss upfront will assist proponents and Councils to work out practical offsetting solutions to avoid or minimise impacts; for example, by locating new development away from areas of high conservation value.


The biodiversity certification process gives planning authorities the option to integrate biodiversity conservation with proposed development outcomes at the strategic planning stage. At this point, a landscape approach to new development designed to improve or maintain biodiversity values can be ‘locked into’ development assessment.


ACTION 2.4.1: Finalise biodiversity certification for West Dapto

The NSW Government will: 

  • work with Wollongong City Council to progress biodiversity certification for the West Dapto urban release area over the next 12 months to determine which areas are available for development and for protection, and the offset areas and potential funding mechanisms (including a levy).

Since 1982, the Illawarra Urban Development Program has been the NSW Government’s tool for managing land and housing supply in the Illawarra. It monitors the planning, servicing and development of new urban areas in Wollongong, Shellharbour and Kiama, as well as the provision of housing in existing urban areas. 


ACTION 2.5.1: Monitor land and housing supply through the Illawarra Urban Development Program and incorporate the Shoalhaven Local Government Area 

The NSW Government will: 

  • continue to monitor and coordinate the development of regional land releases through the Illawarra Urban Development Program; and
  • extend the Illawarra Urban Development Program to include urban areas in the Shoalhaven. 

Page last updated: 25/09/2019