The balloon was conducting a passenger carrying flight from Picton to the Campbelltown area, with an intermediate landing at Menangle. The forecast wind was a 14 knot southerly at 1,000 ft. However, during the first flight the pilot determined the prevailing wind to be calm below 500 ft. During the second stage, the pilot noted that the wind above 500 ft was backing to the west although it's speed was not increasing. With the balloon now heading towards the Holsworthy forest, the pilot decided to land early and made an approach to a large paddock beyond a small dam next to a road. The pilot subsequently reported that, late in the approach, the wind speed suddenly increased to about 15 kt accompanied by a strong wind shear. He also encountered strong downdraughts as the balloon crossed a tree line alongside the road. He attempted to overshoot from the approach, but the balloon continued to descend. The balloon touched down firmly but was carried into the dam by the wind. A nearby powerline held up the balloon envelope as the basket drifted across the dam and grounded on the bank. Neither the pilot or any of the passengers were hurt.