If I remember correctly, the last I heard was that they were working on a public space to tie Avalon together and to kick-start the story they have planned for the Avalon space.
There is indeed an Avalon Keep public space in the works. Preview pics of it can be found in an interview Heavy Water producer Stephen Grose gave to HSM team writer Burbie52 (as well as in a promotional album here). He also provided, as part of the interview, a brief preview video snippet (no audio) of Ballista Fields, one of the mini-games which will be present in the public Avalon Keep environment:
Hope that helps.
They were showing videos of that game back in August as if it was something already about to be released, some even speculated that it was already out in EU. So nothing yet on the status or release date of new content and this is such a disappointment.
The article Norse is referring to is an old interview that does not help in determining the status of a release day for any new content. Although Heavy Water has been releasing new content on a regular basis, its has not been in par with other Devs that release a space then have add-ons every week like nDreams and Juggernaut. Hopefully, we will hear from them in regards to Avalon soon.