In H2 2025, the NSW property market showed improved transaction activity, supported by earlier rate cuts, though renewed rate rises have tempered the outlook in 2026.
Office and retail sectors saw strong investment demand, with offshore and private capital active, while leasing fundamentals remained solid. Industrial activity stabilised, with moderating rental
growth amid rising supply. Residential development remained constrained by high construction costs, limiting new supply despite improved sentiment. Healthcare and hotels continued to perform strongly, supported by defensive fundamentals and undersupply. Overall, investor focus remains on high-quality assets, with caution expected to persist as interest rate pressures impact market activity.
There is a degree of market uncertainty across all markets in early 2026 driven by geopolitical tensions in the Middle East, and ongoing trade policy adjustments. This environment has contributed to heightened volatility across equity markets and, notably, US Treasury yields. Oil prices are currently rising with impacts to cost of living. Continuing geopolitical instability may place upward pressure on inflation. Early evidence of tariff related inflationary pressure has been reported in the US and is expected to continue during 2026 as businesses pass on higher input and substitution costs. Australia’s economy continues to be influenced by broader economic conditions, contributing to a cautious domestic market.
Our experts across valuation sectors share their analysis and insights in our latest NSW Market Snapshot covering the second half of 2025, as well as what to look out for during the remainder of
the year, across Health, Aged Care and Seniors Living, Hotels & Accommodation, Industrial, Office, Residential Development and Retail.
Click the link below to read the full Snapshot.
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