Housing developments are being delayed in South Australia’s second-largest city due to water and sewerage infrastructure concerns. 

Mount Gambier, located about five hours south-east of Adelaide, has had one of Australia’s fastest-growing regional housing markets since the COVID-19 pandemic. 

Property website Domain recorded a 63 per cent rise in house prices in the town in the past five years to April.

In addition, market analyst Proptrack recorded the regional SA rental vacancy rate at just 1.04 per cent during April. 

But despite this demand, developments, such as the 350-home Limestone Estate project on the outskirts of Mount Gambier, are at a standstill. 

Developer Parry Kumar said 35 allotments had been sold for the next two stages of the project, worth about $5 million in housing contracts, but the stages were yet to receive SA Water approval after eight months. 

Mr Kumar says more than $500,000 worth of site works have occurred at the next two stages of the Limestone Estate project, but work has now halted. (ABC News: Chris Gillette)

The delay meant contracts with home buyers were in jeopardy as a start date for construction had to be pushed back. 

“We are at the receiving end as the developer in terms of money and the town is at the receiving end because it’s not getting enough housing supply,” Mr Kumar said. 

“It’s frustrating because people are investing in the town and want to bring more houses to the town and want to fill the rental shortage. 

“But these delays are killing that possibly.” 

Water master plan in the works 

An SA Water spokesperson said the existing infrastructure in Mount Gambier was able to meet customer demands. 

The spokesperson said the government entity was creating a 30-year master plan for the town’s wastewater network to cater for more development applications as demand increased. 

“We’re continuing to accept and review all development applications as per our usual process, with 37 new residential houses approved for construction in Mount Gambier during the past 12 months,” the spokesperson said. 

“As a result of the rapid, unprecedented housing growth across South Australia — including in Mount Gambier — and subsequent requests for new water and wastewater services, we acknowledge our capacity to process applications has been impacted. 

Mount Gambier has a population of more than 27,000 people. (ABC South East SA: Bec Whetham)

“[We] assure developers we’re working as quickly as possible to provide accurate, timely advice on servicing solutions to their developments.”

City of Mount Gambier CEO Sarah Philpott said the delays were frustrating for a town looking to grow, but having infrastructure in place before development started was important. 

“We know when housing supply is so constrained, sometimes you can’t get the people you need to support our health services or support key skilled jobs,” she said. 

“We see this housing issue as fundamental to the growth of our city.” 

Past investment behind delays 

Master Builders SA CEO Will Frogley said it was not just Mount Gambier, but other regional projects and even new developments on the outskirts of Adelaide that faced delays. 

He said past government investment in water infrastructure had lagged in these areas, meaning they were not suitable for quick growth in demand. 

Master Builders SA chief executive Will Frogley says past funding shortfalls have led to delays for builders and developers. (Supplied: Master Builders SA)

“There just hasn’t been enough investment in the past to keep up with demand and that’s created a backlog,” he said.

“Now it’s very obvious significant funding is required to get these developments moving. 

“You’ve got to have critical infrastructure to get these developments happening and water is an essential part of that.

“It has to happen otherwise the homes that need to be built won’t happen and there are a lot of people desperate for a house at the moment in Mount Gambier and other parts of the state as well.” 

Posted , updated