A building boom is underway in the Illawarra, and there's no signs of it slowing down.

In the past 12 months, a total of 1299 residential projects were approved, with a particular jump in the number of townhouses, with 110 projects over two storeys approved in March 2022.

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Waste business Tiny Tins has seen consistently high demand for their services over the past two years.

"Over COVID I feel like everyone was focusing more on building things," said owner Karlie Zec.

Along with husband and co-owner Adrian Lamacchia, the couple have been operating the Unanderra-based business for the past six years and have been able to service a growing demand in the Wollongong building market.

"Because we specialise in tight access, we've been able to get a lot of the high rises, because we've got the smaller trucks," Ms Zec said.

Apart from the construction shut down in 2021, Ms Zec said the business had been getting busier and busier, and was able to hire two drivers and purchase three additional trucks.

But, just as homeowners are experiencing, Ms Zec said there is "definitely" a backlog in work to be done.

"I don't know if it's a supply issue, or if it's just a backlog from the influx of demand, but everything's a bit difficult to get at the moment," she said.

"A lot of our builders have been waiting for materials, because there's just such a high demand for them at the moment."

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University of Wollongong economics professor Alex Frino said that housing approvals were a trick of the trade for economists, as they give an indication of future economic activity.

"The construction sector is a crucial industry, in the broader economy, and building approvals tell us about construction activity," he said.

"Put those two things together, and you've got a very good predictor of economic activity over the next 12 to 36 months."

While the value of approvals in Illawarra remained steady in the past year, growing by 1 per cent, approvals in greater Sydney dropped by 5 per cent.

Traditionally, the Illawarra market has lagged the Sydney market, but with prices rising faster in the Illawarra than in Sydney over the past year, the local market for the building industry will remain strong, even as pressure in Sydney drops off.

However, as supply chain pressures locally and overseas continue, and interest rates rise, the building sector is likely to cool off in the near future, Professor Frino said.

"There's only one conclusion that you can draw from those trends, which is that construction activity will decline. But thankfully, the economy is robust and the construction sector is very robust, so it can absorb some of this impact for some time without a significant downturn."

What this means for homebuilders and renovators is that it might be hard to get a tradie to return your calls now, but it may not be long before they start calling you.

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