From the sounds of it there is about 4000 more connections worth of capacity before the current system is at 100% capacity.
This sounds like a lot but ideally you do not want to run a system at 100% capacity for long periods as it leaves no spare capacity for surge events (where there is a sudden short term increase in usage), weather events and such like.
It also creates problems with loss of capacity due to equipment breakdown &/or maintenance, when that happens and they can’t fix it quickly enough then the raw waste will have to be temporarily stored (causing the equipment to be running at over 100% capacity running a much higher risk of further equipment breakdowns to deal with the normal usage plus the stored waste) or more likely minimally treated then released into the ocean.
So restricting the use of the remaining capacity while it causes problems for people who want to develop properties it saves rate payers hundreds of thousands of dollars in unexpected waste water costs and reduces the chances of the council having to release waste into the environment.
The did explain this in the “Watercare responds” section, in a “we have to word this so it won’t cause problems in court” fashion.
The problem is their message was lost in the forest of “oh woah betide this property developer not being able to build” that was most of the article.
The article is 85% about the property developer and what they wanted, very biased and poor reporting.