Is the colloquial Australian term 'festy' actually a word?

Solution 1:

The Merriam Webster hasn't heard of it, but the Urban Dictionary lists it with the first two senses as back-constructions of "fester", respectively:
Bad, disgusting, undesirable, revolting.
and
anything that is dirty and/or smelly. It is particularly used to describe people, but may be used to refer to objects or animals.

As English seems to expand much more than it contracts, it seems that in another decade or so if not less, Webster will list it and then Oxford.

Solution 2:

I'm Australian and I've heard the word festy before, it means dirty or disgusting. Sometimes you can call people festy or things.

From the Collins dictionary:

Festy - dirty, malodorous, very bad