Australia & New Zealand property markets stay resilient

Australia and New Zealand property markets remained resilient in the first half of 2026, although macroeconomic headwinds tempered activity in recent months, Cushman & Wakefield said.

Senior executives at the real estate services firm said confidence was gradually improving across the commercial real estate sector. Investors and occupiers remained active but were more selective about pricing, income strength, and long-term asset quality. Domestic capital remained an important source of demand, while overseas investors stayed engaged in both markets.

Noral Wild, Chief Executive - Australia, New Zealand and North Asia at Cushman & Wakefield, said the market continued to transact despite subdued business and consumer sentiment. Activity persisted across several sectors, although investors and occupiers were taking a measured approach as they sought clearer signals on economic conditions.

"The first half of 2026 has reinforced the resilience of the Australian and New Zealand property markets, despite a backdrop of economic uncertainty, subdued consumer sentiment and ongoing caution from businesses and investors. While capital remains available and transaction activity has continued across a range of sectors, market participants have remained highly disciplined. Investors are focusing on quality opportunities, occupiers continue to prioritise efficiency, and organisations are taking a measured approach to decision-making as they seek greater clarity around economic conditions. We have seen pockets of increased activity, particularly where pricing expectations have aligned and long-term fundamentals remain compelling. Domestic capital has continued to play an important role, while international investors remain engaged by the transparency, stability and long-term appeal of both Australia and New Zealand. While conditions remain somewhat challenging, the market has demonstrated an ability to adapt. As we move into the second half of the year, we expect confidence to improve gradually rather than rapidly, with opportunities emerging for those prepared to take a long-term view," Wild said.

New Zealand

In New Zealand, transaction activity improved from recent periods as buyer and vendor expectations moved closer together. Even so, investment appetite remained focused on assets seen as capable of holding income and value over the longer term.

Paul Huggins, Managing Director, New Zealand at Cushman & Wakefield, said industrial property, infrastructure-related assets and the living sector were showing the strongest structural support. Any recovery, he said, was likely to unfold steadily rather than through a sharp rebound.

"The New Zealand market has shown encouraging signs of stabilisation during the first half of 2026, even though investors are applying more caution in their decision making. Transaction activity has improved compared with recent periods, supported by a gradual return of capital and increasing alignment between buyer and vendor expectations. However, investors remain selective and focused on assets that can demonstrate strong income resilience and long-term fundamentals. We expect activity to continue improving through the second half of the year, although the recovery is likely to be measured rather than rapid. Opportunities remain strongest across industrial, infrastructure-related assets and the living sector, where structural demand drivers continue to support investor interest," Huggins said.

Selective demand

Across commercial real estate more broadly, investors, occupiers and owner-operators were still participating in the market, but with tighter discipline around risk and valuation. That left room for deals where pricing was realistic and assets offered scope for improvement.

David Hall, Head of CRE & Head of Brokerage Logistics & Industrial - ANZ at Cushman & Wakefield, said transaction activity had continued in all major markets. Capital was still available for the right assets, he added.

"The first half of 2026 has been defined by a market that continues to work through economic uncertainty while gradually rebuilding confidence. Investors, occupiers and owner-operators remain active, but decision-making has become increasingly selective. The focus is firmly on asset quality, income durability and long-term relevance, rather than broad-based market optimism. Transaction activity has continued across all major markets, although participants remain disciplined in their approach to pricing and risk. In this environment, opportunities are emerging for investors who can identify assets with strong fundamentals and clear value-add potential. As we move into the second half of the year, we expect activity levels to improve gradually. While challenges remain, including ongoing economic uncertainty and cautious business sentiment, there is growing evidence that capital is ready to transact when the right opportunities arise," Hall said.

The firm also highlighted a shift in how occupiers manage property portfolios. Rather than treating facilities management as a standalone building function, businesses are increasingly linking workplace services, sustainability measures, and technology to efforts to cut costs and improve the employee experience.

Jon McCormick, Head of Integrated Facilities Management and Asset Services, ANZ at Cushman & Wakefield, said occupiers were trying to extract more value from each asset. Quality workplaces remained important in attracting and retaining staff across Australia and New Zealand, he said.

"2026 to date has reinforced that occupiers are placing greater emphasis on operational resilience, workplace experience and cost efficiency. As organisations continue to optimise their real estate footprints, the focus has shifted from simply managing buildings to extracting greater value from every asset across the portfolio. We're seeing clients increasingly prioritise integrated solutions that bring together facilities management, workplace services, sustainability and technology. In a market where businesses are seeking both efficiency and agility, operational excellence has become a key differentiator. Across Australia and New Zealand, the quality of the workplace remains a critical factor in attracting and retaining talent. The most successful organisations are investing in environments that enhance employee experience while delivering measurable operational outcomes," McCormick said.

Project focus

Project and development activities also continued despite pressure from rising construction costs and supply chain disruptions. Clients were still backing workplace, industrial and critical infrastructure schemes, but were directing spending more carefully, Cushman & Wakefield said.

Todd Hanrahan, Head of Project & Development Services, Australia & New Zealand at Cushman & Wakefield, said clients were favouring projects that offered operational, cultural and sustainability gains. Planning was increasingly focused on flexibility and longer-term use rather than straightforward expansion, he said.

"This year thus far can be characterised by growing confidence in project delivery, despite ongoing cost and supply chain pressures. Clients are continuing to invest in workplace, industrial and critical infrastructure projects that support long-term business objectives and future growth. While construction costs remain a key consideration, we're seeing a more disciplined and strategic approach to capital deployment. Organisations are prioritising projects that deliver tangible operational, cultural and sustainability benefits rather than simply expanding for expansion's sake. There is a growing focus on quality, flexibility and futureproofing. Whether it's office fit-outs, industrial facilities or major redevelopment projects, clients are looking beyond today's requirements and planning for the needs of the next decade," Hanrahan said.

Elsewhere, the firm said strategy and sustainability had become more central to property decisions. Businesses are weighing economic uncertainty, technology change and workforce expectations while also facing pressure to improve building performance and reduce operating costs.

"The first half of 2026 has reinforced that sustainability is now a core business and investment consideration. Asset owners, investors and occupiers are increasingly focused on initiatives that improve building performance, reduce operating costs and support long-term asset value. We are seeing a clear shift from sustainability ambition to implementation. Across Australia and New Zealand, organisations are prioritising practical decarbonisation strategies, energy efficiency measures and resilience planning that deliver measurable environmental and commercial outcomes. As market expectations continue to evolve, sustainability is becoming a key differentiator for real estate. The assets that will outperform over the long term are those that can successfully combine strong environmental performance with operational efficiency and occupier appeal," said Matt Clifford, Head of Sustainability & ERG, Asia Pacific, Cushman & Wakefield.