Kiama Harbour has always been important to the growth and development of the region. The difficulties of overland transport to Kiama meant access from the ocean was a vital link to the rest of Australia in the early days. All goods, equipment, and people arrived and left by sea. However all larger ships had to use a smaller boat to ferry the cargo and passengers to Black Beach as there wasn’t a large enough jetty or adequate mooring.
It became apparent that Kiama was in need of better harbour facilities and lobbying began with a petition sent to the NSW Government 1864 seeking the construction of a shipping basin. Construction didn't start for another 7 years with the new harbour opening in 1876, five years after starting. The project was fraught with difficulties, with problems obtaining; the blasting powder, steel for drilling, pumps powerful enough for the task and a dredge for working under water. Local Kiama residents felt the construction of the harbour was not seen as important as infrastructure development in the more major towns and were very bitter towards the NSW Government.
High tide meant that prior to 1871 Blowhole Point was cut off at the eastern end of Terralong St at Storm Bay. The rock from the floor of the basin was used to join the point to the rest of Kiama. Joining up Blowhole Point meant that the harbour was protected as large seas would wash through the gap into the harbour and across to Pheasant Point, disrupting shipping and creating dangerous conditions. Residents and visitors today enjoy the picturesque walk around the harbour and out to the blowhole and lighthouse. Following the harbour development in 1876, residents and business people of Kiama enjoyed the trade boom that resulted with all the additional ships able to use the harbour. Due to the increase in shipping activity a lighthouse was vital, and 11 years later the Kiama Lighthouse was completed.