Australia and New Zealand Water-Cooled Heat Recovery VRF Market to Surpass USD 31 Million by 2030

The Australia and New Zealand water-cooled heat recovery VRFsystems market is witnessing solid expansion—valued at approximately USD 18.5 million in 2024 and projected to climb to around USD 31 million by 2030, reflecting a compound annual growth rate (CAGR) of about 9.0 % through 2030.

In parallel, Australia's portion of the segment is expected to generate revenues of roughly USD 31.74 million by 2030, growing at a CAGR of 8.8 % between 2021 and 2030, while New Zealand’s market is set to reach about USD 4.68 million by the same year at a 6.8 % CAGR. Key growth drivers include rapid urbanization in major cities like Melbourne, Sydney, Auckland, and Wellington, with new corporate office projects and increased demand across sectors such as IT, finance, retail, and insurance. Regulatory measures and sustainability initiatives aimed at reducing emissions, alongside technological strides in energy efficiency, are fueling broader market adoption.

Key Insights

• The corporate offices segment dominates applications, accounting for approximately 45 % of the market in 2024—driven by a surge in construction activity across urban commercial real estate.
• Healthcare institutions are the fastest-growing end-users, supported by rising hospital footfall and targeted government funding for new facility construction.
• System capacity classification shows the 0–50 kW range emerging as the swiftest expanding category (CAGR >10 %) during 2022–2030, ideal for commercial, single- and multi-family residential settings.
• Technological advancement is driving the integration of water-cooled heat recovery systems, valued for their superior energy performance and carbon reduction capabilities compared to conventional HVAC setups. Growing awareness of climate impacts boosts commercial uptake.
• Regionally, Australia leads in market size, supported by the nation’s USD 377.8 million infrastructure budget and a construction industry that contributes around 9 % to GDP, with expected annual growth of 2.4 %.
• New Zealand, although smaller, is poised for steady momentum, with audiences benefiting from regional ventilation product market growth from USD 138.2 million in 2024 to USD 187.5 million by 2030—CAGR 5.3 %.
• On the sustainability front, government policies aimed at reducing emissions and increasing energy efficiency are encouraging adoption of VRF systems in commercial spaces.
• Competitive landscape: With major infrastructure projects underway in urban hubs, developers and HVAC providers are strategically positioning themselves to leverage rising demand, while advanced monitoring and control technologies are being adopted to enhance system performance.
• Emerging opportunities: HVAC vendors are exploring smart controls, IoT integration, and scalable VRF solutions—especially small- to mid-capacity units—to capture both commercial and residential segments.
• Long-term trend: As offices rebound and healthcare builds expand across Australia and New Zealand, the demand for efficient, adaptive HVAC systems like water-cooled heat recovery VRF is set to maintain strong momentum through 2030.