Institutional investors now prioritize Australia’s residential real estate above all other property types, Cushman & Wakefield’s APAC Living Investor Survey 2026 Australia Spotlight reveals. The report, based on input from diverse industry stakeholders, shows this shift in capital allocation trends.
The sector ranks ahead of office, industrial, and logistics assets, as capital chases exposure to the nation’s chronic housing undersupply and resilient rental growth. Such a hierarchy signals that demand for office space is lagging behind the need for homes that can be rented out over the long term.
Australia and New Zealand are the most preferred Living investment destinations across the Asia-Pacific region, ahead of Japan, showing the growing appeal of living-sector investments. Both countries benefit from population growth and limited new supply, which fuels the appeal for developers and fund managers alike.
More than half of diversified investors ranked residential assets as their preferred Australian real estate sector, ahead of industrial and logistics, office, hotels, and retail. This preference places the residential segment ahead of traditional commercial categories such as hotels and retail.
Feasibility concerns are the biggest barrier to investment, identified by 40 per cent of respondents, followed by planning approvals and complexity, cited by 28 per cent. Complex approval processes often extend project timelines, adding cost pressure for developers.
Investment Deployment Challenges
Investor demand remains abundant, yet developers and investors still struggle to locate viable opportunities for capital. Tax settings and a shortage of investable stock were also noted as significant impediments.
“Demand for rental housing remains exceptionally strong and institutional capital is ready to deploy; however, feasibility constraints, planning delays and limited stock continue to restrict the market’s ability to meet that demand. The challenge now is creating more pathways to deliver investable product at scale.”
