Kiama’s skyline could soon change, with zoning amendments paving the way for six storey developments. But will developers take the leap?

Rising construction costs, strict regulations, and community concerns could prove major hurdles. Some see opportunity, while others remain wary.

Recent zoning changes have made Kiama more attractive for six storey developments, particularly within the Central Business District (CBD).

In November 2023, Kiama Council approved amendments to the Local Environmental Plan, increasing height allowances in key areas.

Additionally, the New South Wales Government’s Low and Mid-Rise Housing Policy, coming into effect on 28 February 2025, supports mid-rise housing within 800 metres of key transport hubs.

Given these regulatory shifts, some developers are considering new projects in Kiama, but many remain cautious.

Recent analysis suggests that Kiama, alongside Byron Bay and possibly Shell Cove, is one of the few regional areas in New South Wales where six storey developments may be financially viable.

This is due to Kiama’s high real estate values, which rank among the highest in regional New South Wales.

Outside of these select locations, developers are generally finding Class 2 apartment buildings unfeasible due to soaring construction costs.

The construction sector is still grappling with stricter regulations introduced in response to high-profile structural failures, such as the Opal Tower.

Post-Opal reforms have imposed increased safety, compliance, and defect rectification measures on developers, leading to higher costs and project timelines.

While zoning changes now allow for six storey developments, Kiama’s traditionally lower-density planning approach, aimed at preserving the town’s character and views, could lead to pushback from the community and council.

Public concerns about infrastructure strain, traffic congestion, and overshadowing remain at the forefront of discussions.

However, Kiama’s Director of Planning has pointed out that despite the changes, the amount of R3-zoned land within the 800m radius where six storey developments are allowed is minimal.

Furthermore, Kiama’s Development Control Plan (DCP) requires a minimum 25-metre lot width for residential flat buildings, a condition that further restricts viable locations. While six storey buildings are now possible on paper, the actual opportunities for development are significantly constrained.

Higher taxes, levies, and infrastructure charges present another hurdle. In some regions, these expenses now account for up to 41% of total development costs, making apartment projects less financially viable.

In smaller markets like Kiama, where land values and demand differ significantly from major cities, these added costs require developers to undertake rigorous financial assessments.

Additionally, bank lending restrictions have tightened in the wake of past failures, making it harder for developers to secure financing, especially for large-scale residential projects.

Many developers are now relying on experienced quantity surveyors to ensure project feasibility before committing to new builds.

Kiama’s property market caters primarily to families, retirees, and lifestyle-driven homebuyers, who often favour houses, townhouses, or low-rise developments over mid-rise apartment complexes.

While recent zoning changes could increase housing supply, it remains uncertain whether demand will be strong enough to justify large-scale investment.

Unlike Sydney’s high-density areas, Kiama does not have the same investor-driven property market. This makes six storey developments a higher-risk venture, particularly if rental demand or resale potential fails to meet expectations.

One major concern among locals is that rapid high-rise development could erode Kiama’s unique identity.

Comparisons have been made to Shell Cove, where modern developments have created a landscape that some argue lacks distinct character. Critics warn against Kiama becoming just another featureless coastal town, a risk sometimes referred to as "the geography of nowhere."

Urban planning experts stress that successful six storey developments are not just about height but also about the pedestrian experience.

Poorly planned buildings risk becoming isolated, characterless towers rather than contributing to a vibrant, walkable town centre.

Thoughtful design that prioritises street-level engagement, shading, and pedestrian-friendly elements will be crucial in preserving Kiama’s charm.

The broader construction sector continues to face skilled labour shortages, particularly in regional areas where experienced builders for mid-rise developments are harder to find.

Material costs and supply chain delays have also contributed to increased building expenses, adding further risk to large-scale projects.

While Kiama’s zoning changes and government-backed housing policies make six storey developments possible, they do not guarantee a surge in construction.

Developers must weigh the financial, regulatory, and market risks before moving ahead.

Those who do proceed will need to conduct rigorous feasibility studies, engage quantity surveyors, and carefully navigate community concerns.

For now, Kiama is at a crossroads. Will six storey buildings become a fixture of its evolving landscape, or will the barriers prove too great for developers to take the plunge?