Australia and New Zealand Water-Cooled Heat Recovery VRF Systems Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Australia and New Zealand Water-Cooled Heat Recovery VRF Systems Market Size

Australia and New Zealand Water-Cooled Heat Recovery VRF Systems Market Trends and Growth Drivers

Green Buildings Are Biggest Trend in Oceania

The growing trend of green buildings, along with governments’ energy efficiency regulations, leads to a growing demand for VRF systems as they act as a complete heating, ventilation, air conditioning solutions for a building. The preference for green/smart buildings is rising owing to the high carbon emissions, increasing pollution levels, and urge to create a healthy and sustainable environment. Thus, real estate companies are focusing on the construction of green/smart buildings due to their increasing demand.

The World Green Building Council (WorldGBC) has pledged to cut embodied carbon emissions by 40% by 2030 and achieve 100% net-zero emissions for buildings by 2050. Moreover, the Green Building Council of Australia was formed in 2002 for developing the Green Star environmental rating system for buildings. Now, Australia is planning to construct only certified green buildings by 2050.

Similarly, the New Zealand Green Building Council was established in 2005 with the vision to promote sustainable buildings. It is contributing to building green homes, for lower carbon emissions. The country’s target is to update the New Zealand Building Code to ensure all newly constructed buildings are 100% carbon-free by 2030.

These stringent regulations will bound to boost the requirement for VRF systems in Australia and New Zealand.

Large-Scale Commercial Construction Drives Market

• The rising number of commercial projects is a major factor propelling the growth of the ANZ water-cooled heat recovery VRF systems market.
• This is attributed to the growing population and increasing construction industry in ANZ.
• As per the Australian Bureau of Statistics, between the September and December quarters of 2023, engineering work done in Australia rose by 4.1%.
• Similarly, during June 2022 to June 2023, non-residential construction activity in New Zealand grew by 28.3%, as per its Ministry of Business, Innovation & Employment.
• Further, the market growth is attributed to the energy efficiency, consistent comfort and less space requirement of VRF systems, which are leading to the increasing demand for them across different commercial spaces, including offices healthcare settings, and hospitality spaces.

Lack of Skilled Technicians Hampers Market Growth

• The lack of skilled technicians in ANZ is a major concern. Thus, due to the low number of people in this occupation, VRF installation and servicing are expensive.
• The maximum impact of hydrofluorocarbon (HFC) phaseout would be on the technicians who install and maintain VRF systems.
• Tasks involved in operating VRF systems with low-GWP refrigerants include risk management, control complexity, hazard assessment, and leak minimization.
• Technicians with new skills, knowledge, and high-quality training are required in order to install and maintain the systems and cope with the changing demands.
• Hence, the lack of skilled manpower may hamper the growth of the market to some extent.

Australia and New Zealand Water-Cooled Heat Recovery VRF Systems Market Analysis

Application Analysis

• Corporate offices have the largest share in the market, of 45%, in 2024.
• VRF systems ensure the use of energy to cool or heat corporate offices that are already occupied.
• Due to their ability to maintain temperature, these systems are highly preferred in offices.
• The construction of offices and buildings in urban areas has been increasing steady, attributed to the growing population in major cities, including Melbourne, Sydney, Auckland, and Wellington.
• There are large-scale office projects in the construction pipeline, which indicates that building developers remain poised to take advantage of a recovery in office demand.
• This further leads to the opening-up of more corporate spaces for the financial services, insurance, banking, information technology, retail, and other sectors, which, in turn, expand the economies of these countries.
• The healthcare category is expected to witness the fastest growth during the forecast period in the water-cooled heat recovery VRF systems market in Australia with a CAGR of 9.4%.
• This can be attributed to the increasing population and the rising need to improve healthcare facilities in Australia and New Zealand.
• According to the Australian Bureau of Statistics, in December 2023, Australia's population had grown b 651,200 (2.5%) from to the previous year.
• Since the population is increasing, the need for medical services is rising, thus facilitating the demand for heat recovery VRF systems.
• The development of hospitals in these countries is an important factor for the rapid market growth in this regard.
• VRF systems can also be used for reducing energy consumption, and have a long life and high performance, thus these are widely accepted in hospitals.

The following applications are analyzed in the report:

• Corporate Offices (Largest Category)
• Healthcare (Fastest-Growing Category)
• Hospitality
• Others

Australia and New Zealand Water-Cooled Heat Recovery VRF Systems Market Share

Australia and New Zealand water-cooled heat recovery VRF systems market is fragmented on account of the presence of a wide range of companies, which offer a variety of systems for diverse applications, regional variations in brand preference, price-sensitivity of a certain chunk of the population, evolving energy efficiency regulations, and a major scope for system customization in these systems as per application. Additionally, companies use different distribution channels to reach customers, which further drives fragmentation.

Australia and New Zealand Water-Cooled Heat Recovery VRF Systems Market News

• In March 2023, Daikin Ltd. joined the World Business Council for Sustainable Development to enable itself to work with other companies developing energy-efficient HVAC solutions.
• In May 2024, Mitsubishi Electric Corporation launched the Serendie digital platform, which enhances communication between a host of electrical appliances in a building and gathers real-time data from them for operational monitoring predictive maintenance.
• At Mostra Convegno Expocomfort 2024, held in Milan, Italy, during March 12–15, LG Electronics showcased an array of new residential and commercial HVAC systems, including a heat recovery unit that uses R-32 and VRF solutions for light-duty commercial applications.
• In November 2023, Mitsubishi Electric Corporation unveiled a new aluminum vertical flat tube design for the heat exchangers of heat-pump air conditioners.
• At the 2023 AHR Expo held at in Atlanta, U.S., in February, Daikin Ltd. exhibited a packaged rooftop HVAC solution for commercial buildings, alongside other offerings.