Federal cash and $300m Keyton project at UOW chip away at aged care shortfall
Two projects, one growing crisis
The Illawarra’s aged care shortfall is being attacked from two directions at once — at wildly different speeds and scales.
The federal government this week confirmed $25.9 million to fund 73 new beds across six existing homes, deliverable within two years. Just last week a $298 million, 180-bed aged care home at the University of Wollongong’s Innovation Campus, a decade in the making, reached public exhibition. Even if it is approved, it is unlikely to open before mid-2027.
Combined, the two projects would provide 253 of the 1000 extra beds the region already needs, an expert taskforce estimates.
The now: 73 beds, six facilities, two years
The Aged Care Capital Assistance Program allocation, the second of four funding rounds, directs money to six providers already mid-planning on expansions:
Health Minister Mark Butler said the round would deliver “an extra 73 beds” for the region. Aged Care Minister Sam Rae said the government would “continue to invest in aged care supply as our population ages.”
Rae told ABC Illawarra the department deliberately chose projects with the best chance of moving fast. A typical aged care development takes five to seven years to open, he said, but these six are expansions of existing homes already well into planning, the basis for the government’s 24-month target. He stopped short of guaranteeing that timeline, noting construction outcomes are inherently uncertain, and confirmed normal council and state planning approvals still apply in full.
Cunningham MP Alison Byrnes said: “These new beds will help ensure local people can age with dignity and receive quality care, close to home and close to their families.”
“These additional beds will not only support older residents with complex care and dementia needs, but they will also help ease pressure on families, frontline workers and our local hospitals,” Whitlam MP Carol Berry said.
Rae described the Illawarra as one of four regions selected in this round, alongside metropolitan Adelaide, metropolitan Perth and the Hunter, on the strength of unmet demand and project pipeline. Results for the Hunter and Perth rounds are expected shortly.
The later: $298 million, a decade of delay
While that money moves, a far larger and slower project has entered its final regulatory stretch. Keyton’s State Significant Development Application for the UOW Health and Wellbeing Precinct opened for public exhibition on July 23 and closes August 5 - a two-week window for a project first mooted in 2017.
Keyton head of development Jason Fitzgerald said the lodgement reflects years of detailed planning and collaboration on the project to deliver lasting benefits.
“This precinct has always been about more than buildings. It’s about creating a place that responds to the Illawarra’s ageing population, supports better health outcomes, and connects housing, care and research in a meaningful way,” Fitzgerald said.
The application seeks approval for three buildings on 3.5 hectares of the Innovation Campus: a seven-storey residential aged care facility with 180 beds - up from 120 in earlier plans - co-located with a 60-place childcare centre, and two nine-storey towers containing 249 independent living apartments. A landscaped “green heart” and a First Nations viewing point overlooking Mount Keira and Mount Kembla complete the precinct.
A registered quantity surveyor’s report prepared for Wollongong City Council by Napier & Blakeley, dated June 23 and signed by director Peter Hammond, puts the estimated development cost at $298,433,116 excluding GST (about $328.2m including GST) up from roughly $250m estimated in 2021. The report explicitly notes it is not a tender estimate and has not been independently verified against actual build costs.
If approved by the NSW Planning Minister on the government’s early-2027 timeline, construction would start by mid-2027 — five years later than originally projected when Lendlease (Keyton’s former parent) was selected as development partner in 2017 following a national EOI process.
Who’s paying, and who’s watching
The ownership structure behind the development has shifted mid-project. Keyton was the aged care arm of Lendlease until last month, when Lendlease sold its remaining stake to Aware Super, which is now Keyton’s majority owner.
On the university side, UOW has previously committed $20 million toward the project - a figure calculated against the older $250m cost estimate, not the current $298m. The university recorded a $16.9m deficit for 2025, a year in which it cut about 200 jobs.
A flood impact assessment prepared for Keyton found the precinct’s residential buildings are engineered to remain safe to occupy up to a probable maximum flood event, with finished floor levels set well above required minimums.
What the neighbours are saying
A social impact assessment commissioned by Keyton — and therefore not an independent survey — recorded broadly positive feedback from a consultation that included a letterbox information kit sent to 350 nearby residents and businesses, a telephone survey, and a briefing to the Wollongong Neighbourhood Forum.
But it also documented specific concerns: how elderly residents would be evacuated in a fire, bushfire or flood; noise, infection-control and privacy issues from co-locating the childcare centre directly with the aged care facility; disruption to Innovation Campus tenants who lose existing parking during construction, with one submission suggesting compensation; and a fear that if the second stage depends on sales from the first, the site could sit half-finished “for many years.”
Does any of this close the gap?
Even combined, the 73 beds and the 180 beds at the UOW precinct fall well short of the shortfall a Community Industry Group-led taskforce has put at more than 1000 places across the Illawarra Shoalhaven. That figure, it warns, will grow a further 20 per cent as more Baby Boomers enter their 80s, against a backdrop of no net increase in regional bed numbers in more than a decade.
The taskforce’s estimate lines up with a more immediate pressure point: aged care policy expert Professor Kathy Eagar told a Senate committee earlier this year that around 175 Illawarra patients medically cleared for discharge remained stuck in hospital beds for want of an aged care place.
Rae acknowledged the bed-block problem is long-standing and complex, pointing to a $25 billion federal-state hospital funding agreement struck last year as a partial contributor to relief, while cautioning hospital care remains appropriate for some older patients regardless of aged care supply.
Between a fast-tracked federal round adding beds within two years and a decade-long private development still two years from breaking ground, the region’s two biggest current aged care bets together cover roughly a quarter of the estimated shortfall: leaving the rest to future funding rounds, future developments, or continued pressure on hospital beds.
