Shellharbour is on the rise with apartment blocks becoming popular

The $34 million development, Elevation 77, will commence construction in coming months, just west of Stockland Shellharbour on vacant land at 16 College Avenue.

"I think Shellharbour City has really got its own identity in the last few years with the $330 million upgrade and expansion of Stocklands, more retirement living, and a trend of residential apartment living becoming a desired lifestyle choice for those looking to downsize," apartment selling agent Mark Spinelli said.

"In the coming years we will see even more buildings popping up to meet the increased interest of prospective buyers."

Elevation will also include seven ground-floor commercial premises, rooftop gardens and lake views.

Mr Spinelli said it was expected to be complete by December 2020, with apartment prices starting at $495,000.

Some other unit developments currently in the works for the local government area include 23 Addison Street in Shellharbour Village; plus townhouses, apartments and serviced apartments in the new Shell Cove site.

It comes as Colliers International Wollongong released a report on Thursday, predicting the City of Wollongong to have an apartment shortfall by 2021.

Though there is the perception it is in a boom due to multiple constructions visibly taking place now, it was expected the amount of new apartments coming on the market would not meet demand - calculated by the lack of approvals being sought.

Colliers managing director Simon Kersten said as large sites become more scarce in Wollongong, developers and investors are increasingly seeking other popular areas in the Illawarra - such as Shellharbour.

He said the town planning around the new Shell Cove marina has definitely made the city more attractive with improved infrastructure and amenities.

However, Mr Kersten said there were no "real concrete" developments happening in other new areas like Tullimbar, West Dapto or Kembla Grange. He also noted lack of infrastructure would be an issue for homebuyers and developers.