Warren Fletcher Munday was arrested in August 2020 after neighbours captured video footage of him repeatedly setting fire to furniture and other household items in the dead of night on a vacant, heavily vegetated block less than 100 metres from his house.

He was charged over 28 of the blazes, facing a maximum possible penalty of 21 years' imprisonment, and remanded in custody after police argued he posed a "significant" risk to public safety.

He was released on bail in November.

On Tuesday Wollongong District Court heard the 54-year-old had lived at the address his entire life. His home once backed on to a small farm run by his parents, which had since been subdivided into cul-de-sacs and lots, some with houses on them.

Unexplained fires had been lit on the vacant blocks for many years, the court heard, some of them escaping and threatening nearby homes and property.

Judge Andrew Haesler considered the reports of doctors who placed Munday's overall cognitive ability, verbal skills, non-verbal skills and intellect in the "extremely low" range.

One expert concluded Munday had 'mild mental retardation and delusional disorder related to his entitlements under his parent's estate".

Another found he didn't have the cognitive capacity to enter a plea and provide instructions to counsel, or to comprehend and follow legal proceedings or understand the weight of evidence that may be presented during a trial.

"While he understands simple right and wrong concepts, he has no real concept of the underlying moral and ethical issues," the judge said.

"He cannot grasp the potential consequences of a guilty or not guilty plea or legal concepts such as 'recklessness'. He could not formulate a coherent response or defence to the charges. He has not been able to, as he cannot, instruct his lawyers in any meaningful way. His skills are so extremely low that he lacks the ability to follow the course of proceedings let alone instruct his lawyers or make a defence other than to say 'it's not true'."

The judge found Munday was and would remain unfit for trial. The finding was never disputed by the office of the Director of Public Prosecutions.

The matter was adjourned to August 24 to allow the DPP to consider whether any further proceedings will follow.