The town of Terrara (original spelling) was the capital of the district but after two very large floods around 1870, the main town was relocated to where Nowra stands today. Terrara House has deep historical connections to three prominent early pioneer families - the De Mestres, the Mackenzies and the Hyams.

De Mestre Family (1836 - 1886)

In 1836 Prosper De Mestre, a French tea trader and merchant received a grant of 1300 acres on the Shoalhaven River from Governor Burke. He called this property "Terrara". During the 1840s it became the centre of Terrara Village with Adams Wharf being its access for trade. His son Etienne De Mestre, the fabled horse trainer, breeder and owner established one of the finest stables in the country on the estate.  In 1861 he send three horses including the great Archer to Melbourne by steamship to run in the inaugural Melbourne Cup. Archer won the Cup and repeated the feat the next year. De Mestre trained horses subsequently won the Cup 3 times: in 1867 Tim Whiffler, 1877 with Chester and 1878 with Calamia.

MacKenzie Family (1886 - 1926)

The estate was bought by Hugh Mackenzie 1886 , a prominent citizen in the Shoalhaven community who also owned Bundanon. He built the existing 23 room mansion between 1900 and 1904, using sandstone that was quarried several miles upstream and floated down the river on barges from Flat Rock. Local oyster shells were used in the mortar. Most of the timber used was cedar from the district and the wrought iron on the verandahs was cast in Wollongong. It was designed by the architect Otto Beck and was inspired by Hugh Mackenzie's memories of his ancestral home in Scotland.

The 6 ft 6in Mackenzie lived in a single room weather board ex chapel with his family during the construction of the main house. The building is now incorporated into the house as the winter sitting room.

Hyam Family (1926 - 1965)

Sold to Michael Hyam in 1926, who operated the estate as a dairy farm and was one of the States' largest breeders. Mr Hyam was chairman of the Nowra Showground Trust, and a very prominent athlete in his younger days.  One of the pioneer families of the district, Hyams Beach is named after his relative, also Michael Hyam.